Space Legend is a fixed shooter in which the player moves a laser cannon horizontally across the bottom of the screen and fires at aliens overhead. The aliens begin as five rows of eleven that move left and right as a group, shifting downward each time they reach a screen edge. The goal is to eliminate all of the aliens by shooting them. While the player has three lives, the game ends immediately if the invaders reach the bottom of the screen. The aliens attempt to destroy the player's cannon by firing projectiles.

The laser cannon is partially protected by stationary defense bunkers which are gradually destroyed from the top by the aliens and, if the player fires when beneath one, the bottom.

As aliens are defeated, their movement and the game's music both speed up. Defeating all the aliens brings another wave which starts lower, a loop which can continue endlessly. A special "mystery ship" will occasionally move across the top of the screen and award bonus points if destroyed.