The game is geared for fast-paced, frantic action, and has no "sticky cover" system, as in many contemporary shooters. However, Damnation's hero can climb ladders, ropes, and pipes, and can leap, shimmy, and flip his way up towering structures and across abysmal drops with the press of a button or two. He can take a shot from nearly any position, even hanging upside-down from one hand.

Damnation does not use health bars or gauges in the display, but players do have access to another useful mode of special sight. The game's heroes can use a "Spirit Vision" ability to see all the other combatants on the map, even through walls and other cover. This wall-hack view looks similar to a hazy, infrared display, in which enemies show up with red auras and allies with blue.

Damnation is set in an alternate reality history in which the United States' Civil War has waged on for decades. In the main campaign, players take the role of Hamilton Rourke, a heroic outlaw trying to save both the Union and the Confederacy from evil designs of a warmongering industrialist. Often, the player can see a large mission objective, such as a bridge or monument, from the starting point of the level, and part of the challenge is the adventure of finding the way there.

Multiple paths exist, but players have no mini-map or directional arrows to guide them. Co-op play is supported throughout the campaign, with the second player taking the role of one of the allies that accompanies Rourke through the scripted levels. The game also offers multiplayer competition, in which the ability to move well vertically as well as horizontally is paramount, and no one can hide from Spirit Vision. Damnation began as an award-winning mod for Unreal Tournament 2004, and the retail version is built on built on a later edition of the Unreal game engine. It is the first game by the concept creation company Blue Omega Entertainment and was developed with the original mod's creators