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The aim of Puzzli is to create combos by connecting three or more of the same coloured fish by dropping them from the top of the screen into a grid. Connections can be made horizontally, vertically or in a combination of the two (e.g. an L shape). If a connection is made with at least one fish at the surface, the fish are removed from the grid allowing fish below to rise and potentially create more connections. The player controls a small boat on the surface of a lake, represented by the puzzle grid. Aside from the player character, the boat also contains a secondary character who can hold another fish, which the player can swap with their current fish in order to choose which colour they drop.
When playing multiplayer, creating connections of more than three causes fish trapped in bubbles to drop into the opponent's grid. Fish in bubbles cannot be connected with other fish, but if fish are eliminated in adjacent squares the bubbles burst and the fish become normal. Each player has a 'death line' at the bottom of the screen; if any stacks of fish move below the line the player loses the round. To keep things interesting, the water-line drops over time, meaning that fewer fish are needed to cross the death line. It is also possible to win a multiplayer game by completely clearing the entire grid.