Return to Castle Wolfenstein is a sequel to the early, seminal first-person shooter, Wolfenstein 3D. However, with the advances in graphics technology and gameplay design since the original game, without the name and the occasional in-game references, it might be unrecognizable as a part of the series.

It features a story-based single player campaign (taking up many of the themes from the original game), as well as a team-based networked multiplayer version which features different character classes that must work together in order to win, similar to the concept of Team Fortress. Although there are only four classes - lieutenant, medic, engineer, and soldier - the soldier can be one of several subclasses depending upon the special/heavy weapon that he selects. Some unique weapons not found in other WWII-themed first-person shooters include the airstrike beacon. The multiplayer demo included a beachhead assault map similar to the opening of the movie Saving Private Ryan.

The game is based on Castle Wewelsburg, a 17th century castle occupied by the Germans under Heinrich Himmler's control, and used for occult rituals and practices. Unlike the original Wolfenstein 3D, only a handful of the single player missions in Return to Castle Wolfenstein takes place in the infamous castle/prison. The single player game takes place in Nazi-occupied Europe during 1943 and revolves around U.S. Army Ranger B.J. Blazkowicz, who, along with another agent (Agent One in the Xbox, PS2, and Mac OS X versions), is sent to investigate rumors surrounding one of Heinrich Himmler's personal projects, the SS Paranormal Division. The agents are, however, captured before completing their mission and are imprisoned in Castle Wolfenstein.

Concept art of a "Loper"Taking the role of Blazkowicz, the player must escape the castle and continue investigating the activities of the SS Paranormal Division, which include research on resurrecting corpses, biotechnology, and secret weapons. During the game the player will face numerous foes, including Waffen SS soldiers, elite Fallschirmjager (paratroopers), legions of undead creatures, and horrific Ubersoldaten (supersoldiers) formed from a hideous blend of surgery and chemical engineering conducted by Wilhelm "Deathshead" Strasse. The end boss is an undead Saxon warrior-prince named Heinrich I.

To make the game eligible for sale in Germany, the developers of the game removed the Nazi swastika in Return to Castle Wolfenstein. In its stead, the German forces' logo is a creative logo that is combined from a stylized double-headed eagle (reminiscent to the eagle that was the national insignia of Nazi Germany), a "W" (standing for Wolfenstein), and the Quake III Arena "q" logo whose engine that RtCW used. Every direct reference to the "Third Reich" was removed; thus, the player is not battling Nazis, but a secret sect called the "Wolves" led by Heinrich Holler, whose name is a pun of the original character Himmler (Himmler roughly translates as "Heavener", Holler as "Heller").