Zarlor Mercenary is a vertically scrolling shooter in which players takes the role of a mercenary group. The scenario is a long-time war between the Mendicant and Zarlor races and the mercenaries are hired by the Zarlors to clear out six levels hold by Mendicants.
The basic gameplay consists of using a space ship to kill all enemy opposition on the way to the level end. Getting hit by their attacks lowers the health bar which leads to a life loss when completely gone. On the other hand, every killed enemy or destroyed building gives money which can be used between levels to buy upgrades like mega bombs (damages all enemies on the screen), a back cannon, extra lives or a powerful shield. While the direction is always vertically, the screen can be slightly scrolled left and right.
Up to four players can participate in co-op gameplay; the difficulty is only effected by starting out with less lives. Then there are also two additional upgrades to buy: invisibility to hide from other players and back stabber which damages the other players instead of the enemies.