In Mad Nurse you take on the role of a midwife in a maternity hospital. In this hospital the babies run amok, leaving their cots to stick their fingers into electrical sockets, drink whatever medications they can get their hands on, fall down lift shafts and engage in other fatal activities. This makes it difficult for a trainee nurse such as yourself to bring them under control and it's your job to keep them alive.

Every time a baby jumps out of its cot, you must chase after it and rescue it from potential harm by picking it up and putting it back into its cot. The hospital ward is on three floors linked by a lift. Babies appear randomly at the left of the screen on any of the floors and crawl towards the right of the screen where, if they survive that long, they will fall down the lift shaft. To rescue the little dears you must run to them, pick them up, run to the nearest cot and put them down.

The player has three lives, or trainee nurses, to play with. A nurse is fired if too many babies die on a ward. Keep enough babies alive on your ward for long enough and your nurse moves onto the next ward. Advance through sufficient wards and you get another life (a new trainee is assigned to you). Points are awarded for babies picked up and put into their cots and for medicine bottles picked up. Also, to aid you in your task to save the babies you have a gas button that, when pressed, stops all the babies in their tracks while leaving your nurse free to move around.

The game has three levels of difficulty. The easy or 'No Problem'' level starts on ward 8, the intermediate or 'Problem!' level starts at ward 16, and the hard or 'Fat Chance' level starts at ward 24.