Gregory Horror Show is based on the Japanese anime of the same name. The game starts out with the player discovering a hotel called Gregory House after wandering through a dark forest. After entering the hotel, players are greeted by the hotel manager, a mouse called Gregory. Gregory takes the player to their room to get some rest.
While asleep, players are visited by the Grim Reaper who explains that they cannot leave the hotel until they collect the souls from all of the other guests (twelve in all).
The key gameplay of Gregory Horror Show revolves around navigating the hotel and retrieving bottled souls from guests staying there. Neko Zombie, the cat, shows players the control scheme of the game. Spying in keyholes allows players to eavesdrop on guests.
Guests will usually flee if the player sees them and while still possessing a bottled soul. Once players have recovered the soul from a guest, the guest will become hostile. The guests can run faster than the protagonist which adds an element of stealth.