Nights into Dreams is split into seven levels, referred to as "Dreams".[3] The levels are distributed between the two teenage characters: three are unique to Claris, three to Elliot, and each play through an identical final seventh level, "Twin Seeds". Initially, only Claris' "Spring Valley" and Elliot's "Splash Garden" levels are available, and successful completion of one of these unlocks the next level in that character's path.[4] Previously completed stages may be revisited to improve the player's high scores; a grade between A and F is given to the player upon completion, but a "C" grade (or better) in all the selected character's levels must be achieved to unlock the relevant "Twin Seeds" stage for that character.[5] Points are accumulated depending on how fast the player completes a level,[6] and extra points are awarded when the player flies through rings.[7]
Each level is split up into four "Mares" set in Nightopia and a boss fight which takes place in Nightmare. In each level, players initially control Claris or Elliot, who immediately have their Ideyas (spherical objects that contain emotions) of hope, wisdom, intelligence and purity stolen from them by Wizeman's minions, leaving behind only their Ideya of courage.[4][8] The goal of each Mare is to recover one of the stolen Ideya by collecting 20 blue chips and delivering them to the cage holding the Ideyas, which overloads and releases the orb it holds.[9] If the player walks around the landscape for too long, they are pursued by a sentient alarm clock which awakens the character and ends the level if it comes into contact with the player.[10] The majority of the gameplay centres on flying sequences, which are triggered by walking into the Ideya Palace near the start of each level so that the character merges with the imprisoned Nights. Once the flying sequence is initiated, the time limit begins.[11][12]