Set in the not-too-distant future, humanity has been forced to live in their underground infrastructures for unspecified reasons. Here, bands of "Sewer Jockies" group together and with the use of their armed ships, scour the tunnel systems in order to exterminate the mutated creatures that inhabit the sewers to prevent them from contaminating the above-ground resort area of Solar City.
The player assumes the role of a rookie pilot and is joined by a veteran pilot, Ghost, who proceeds to berate the player for the majority of the game, and his robot scout, Catfish, who provides the player with valuable information. Throughout the game, the player receives transmissions from the owner of Solar City, Commissioner Stenchler, who will allow the player into his resort should they kill one million pounds worth of creatures.
Meanwhile, a fellow jockey by the name of Falco rides into unsanctioned territory following what she describes as a "crazy looking thing," thinking it will lead her on a secret path to Solar City. Later, this creature provides the route for players as opposed to receiving this information from Catfish.
As a rail shooter, the player does not take direct control of the ship, but that of the targeting crosshair in order to shoot the various species as they appear. The player does, however, have limited control of the ship during specific navigation spots. While the directions are always different, there is only one specific route to through the sewer for each time the game is played, as specified by Catfish. Occasionally, Catfish will give the player a series of directions (3, 6, 9 or 12) which must be followed or the game will end. When approaching one of the navigation spots, the player must hold down the A button and press the appropriate direction.
Originally filmed and created in 1987, Sewer Shark was one of a few games, including eventual Sega CD hit Night Trap, developed for an interactive video system called Nemo, created by Tom Zito for Hasbro. When Hasbro canceled the Nemo project, Zito purchased the rights for Night Trap and Sewer Shark back from Hasbro with the hope that they would one day see release.
Years later, Sony would be developing a CD-based addon for Super Nintendo, dubbed Playstation. In search of pre-existing FMV-based games to port to the new system, members of Sony discovered Sewer Shark and wished to license it for the Nintendo Playstation. In response, Tom Zito founded Digital Pictures and worked to port Sewer Shark and Night Trap to the Nintendo add-on, as well as develop all-new FMV-based games.
When Sony's development deal for the Super Nintendo add-on fell apart, Sony struck up a partnership with Sega to release the games for the upcoming Sega Genesis CD add-on, Sega CD, instead. Tom Zito would later express minor disappointment with the change, as the Sega Genesis' limitation of only showing 64 colors on screen at one time severely degraded the video quality over the Super Nintendo, which was capable of displaying up to 256 colors on screen at once.