

Certain tracks in the game terraform as players proceed through them, offering different playstyles between each lap. Players alternate between these modes by driving through blue transformation gates. Like the other modes, players can 'air-drift' around corners to earn boost and can also perform rolls to quickly adjust their position, earning boost for narrowly dodging obstacles. Plane mode, the fastest of the three forms, gives players the freedom to move both vertically and horizontally. They may also be affected by waves made in the water, some of which can be used to leap into the air and perform stunts. Boat mode features true boating physics, requiring players to consider their vehicle's turbulence. The car mode handles similarly to the previous game, in which players can earn boost by drifting around corners or performing tricks whilst in the air. The most obvious is that, at certain points in a race, vehicles can alternate between car, boat and plane modes.

Sonic & All-Stars Racing Transformed is a mascot-based racing game in which players race against each other using over 20 characters from various Sega franchises, such as Sonic the Hedgehog, Jet Set Radio and Space Channel 5, although it features many new mechanics and improvements from the last game. The cars can transform into various vehicles during the race to access otherwise inaccessible paths and traverse certain terrain An example of gameplay in Sonic & All-Stars Racing Transformed.
