Attacks can be launched against enemy wizards (computer-controlled non-player characters). Gold and mana exist as treasures in lairs and ruins, and are interchangeable via an Alchemy option. The latter is generally gained by building mana-generating structures. The former is generally gathered by taxing the player's cities. The only way the player can accomplish these tasks is to build up and exploit an inflow of food, gold, and mana, the game's primary resource. Research of spells and cultivation of the player's magical ability also depends on mana. To build more powerful or specialized military units, the player first upgrades cities with special buildings. In these ways, the player's domain is expanded. Exploration will also reveal the location of enemy cities, to which the player can send out armies. On finding suitable settlement areas, settlers can be sent out to establish a new city there.

Units travel via Towers of Wizardry or spells between the planes, called Arcanus and Myrror. Players require ships to transport units across oceans, unless they are able to fly.

The player sends out units to explore its surroundings, thereby revealing areas covered by the fog of war, finding suitable sites for new settlements, and ruins and lairs containing treasures claimed by defeating their guardians. The player must build an empire from a single starting city. The player can also customize the skills, spell choices, and appearance of the player's wizard, as well as choosing one of fourteen races for the wizard's starting city. The player can customize some aspects of generation (land mass size, strength of magic, etc.). A new game world is randomly generated with every new game. Master of Magic falls among the games which pioneered the 4X game genre.

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