Panzer Dragoon is a rail shooter following the journey of Keil Fluge (unnamed in localized versions), a member of a hunting party who becomes the rider of a powerful blue dragon and joins it on its mission to stop a rival dragon from wreaking havoc on the world. The player moves an aiming reticle (representing the dragon's laser and the rider's gun) over the screen and shoots enemies while the dragon automatically flies through 3D environments on a predetermined track.
As one of the few games available at the Sega Saturn's surprise launch, Panzer Dragoon was the first game created by Team Andromeda. The game also marked the directorial debut of game designer Yukio Futatsugi, who was 25 years old at that time. It is the first game in the Panzer Dragoon series, and introduced the series' gameplay elements and art style.