The title of this game comes from the magical hat that Link has somehow acquired for this game. It looks the same as his usual green hood but it has a beak and eyes that resemble a bird. The character model for Link is from Four Swords. The Minish Cap gives you hints about the game as you go through and can transform you to the same size as the Minish people, a minature race that look like gnomes. It is only possible to transform on certain spots, these can be in the overworld or inside dungeons.

In the normal environment Link is reduced to a small figure just larger than a dot with a picture of his head in a speech bubble showing where he is as you walk around. When he enters the Minish world when shrunk down he returns to a comparatively normal size and surroundings appear huge until he enters the Minish Village, which is conveniently the right size now. The enemies encountered en-route to the Minish village were bees and Dodongo worms that appeared to be the size of any normal enemy. Above their village is a minature Forest Temple. The entrance is tiny so you have to be Minish-sized to enter.

Inside the dungeon, everything is normal sized. There are around four rooms and you needed to push statues around to reach them all. Link cannot yet cross water so he has to rely on strechy toadstools growing next to them to cross. By holding on to the toadstool and pulling it backwards, it throws you across. The first time you do this you find a chest that contains a magical jar. This can suck air or objects in and blow them out again. To get back across the water you need to suck the mushroom towards yourself for the same effect as it is now on the other side and you cannot reach it. The magical jar is also used to suck away cobwebs that are blocking doors. Outside, the magical jar can be used to move you across the water when you’re standing on a leaf by blowing out air, similar to the Deku Leaf in Wind Waker.

The control system is slightly different for this game. The R shoulder button is used as the "action" button and A and B can both be mapped to items. R can also used to roll making walking around a bit faster.

Waking up in your house in the village you find that Princess Zelda has come to visit. She explains about the kinstones that every person has one half of. Pieces of kinstones can be found in chests, jars or just long grass. They are always found as a piece and they can be fused with another, this causes events to happen. Pressing L while next to someone will bring up a menu where you can choose which kinstone to try and fuse. Sometimes the environment will change so that you can get into an area that was previously inaccessible. In one case a giant beanstalk grew up into the sky where a chest of rupees could be found. I found that in the village, most keystone pieces were found close to the owner of the other half but this might not be the case in the rest of the game. The kinstones can also be traded wirelessly, as the game supports the Wireless Adapter and you may be able to fuse kinstones from another game.

There were two other dungeons shown in the demo both of which Link entered at normal size. The first was fairly similar to the Forest Temple but had a few more rooms. In the largest main room there was a large barrel that acted as a bridge of sorts. By burning down the vines that hold it to the walls it is possible to roll it around by running when inside it. There were holes in this barrel and these acted as doors so you could roll it around to where you needed to exit to reach the part of the room you required. One of the holes was covered with a cobweb so again you needed to find the magical jar to clear your path.

The boss of the dungeon is a giant green Chu Chu. Blobs of jelly fall down from above when you enter the room and these form the giant Chu Chu. To make it fall over you have to slash at the base so that it shrinks and then you can attack it while it has toppled over onto the ground. The second dungeon had the same boss but it was much more expansive.

The other dungeon was much larger and you have a boomerang instead of the magical jar. This was also the dungeon where you first got the Four Sword allowing Link to be split into four when on Split Panels. Holding out the Four Sword will charge up the panel that Link is currently standing on, this allows you to make different formations. You will need different formations for pushing large blocks or stepping on multiple switches. You control the “main" Link and the others following are faded. If any of the Links touches a wall or other obstacle the extras disappear and you have to start again. There is a power meter for the Four Sword and once this runs out the Links also disappear.

Other features of this dungeon were a stone platform where you could stand and be shrunken down by the Minish Cap, allowing you to go through the small tunnels in the walls. The Minish Cap also acts as a parachute, in one room you have to cross lava by jumping into whirlwinds, your fall is slowed down by the hat so you can fly across to the next whirlwind.

The game is very similar in style of gameplay to the previous Game Boy Zelda games by Capcom but this is not a bad thing. With the addition of the Four Sword and magical jar as well as the Minish Cap there is plenty of opportunity for new level design that is as much fun as the other games.