In Pooyan, the player controls a pig confined to an elevator on the right side of the screen. The player can move the elevator up and down, and fire arrows which fly to the left. Every few seconds, a meat arrow appears at the top of the elevator's rope. Moving the elevator to the top of the screen will pick up the meat arrow, automatically firing it the next time the fire button is pressed.
Gameplay consists of an endless cycle of three rounds. In the first round of each cycle, the wolves begin at the top of the screen, and attempt to descend using balloons while throwing missiles at the player. Shooting the wolves themselves does no good; the player must shoot the balloons, causing the wolves to plummet to their demise. The wolves usually descend one or two at a time, but every so often a group of four or five descend at once to add to the challenge. The meat arrow comes in handy for these groups; if the meat arrow flies near the wolf, the wolf will immediately fall as it tries and fails to grab the meat. This allows meat arrows to clear several wolves with one shot. If a wolf reaches the bottom safely, it will climb a ladder to the right of the player (where it cannot be hit), periodically reaching out to snap at the player. The player can lose a life by being hit by a thrown missile (only the pig is vulnerable -- hitting the elevator does not count), or by being chomped on by a wolf on the ladder.
Once enough wolves are cleared, the player advances to the second round, where the wolves start at the bottom and attempt to rise to the top using helium balloons. This time the balloons take multiple hits to pop if they are not hit squarely. Wolves that reach the top will line up behind a huge rock, attempting to push it down the elevator's path. The final wolf of this round rises on a multicolored balloon that is unusually hard to pop; if this wolf reaches the top of the screen, five more wolves will appear, extending the round. The player can lose a life either by being hit by a thrown missile, or by allowing seven wolves to reach the top of the screen, at which point they succeed in pushing the rock and crushing the player.
The third round of the cycle is a bonus stage. The wolves rise from the bottom just like in the second round, but the player is given an infinite number of meat arrows (and must use them -- regular arrows are not available). The player receives bonus points for clearing the wolves using as few shots as possible.