Instead of the six-button configuration system seen in past Capcom fighting game series such as Street Fighter II and Darkstalkers, Star Gladiator utilizes a Soulcalibur series-esque four-button configuration system, which consists of two attack buttons for a character's weapon, a kick attack, and a guard defense. The fighters battle upon a hovering arena, and if a fighter is knocked off the arena they lose the round.^[2]

Plasma Reverses are two special guard moves that can be unleashed at any time from within a battle. A Plasma Reflect enables a fighter to deflect an opponent's incoming move and stun them, leaving them vulnerable for a few seconds, while a Plasma Revenge enables a fighter to counterattack an opponent's incoming move and strike back with their own fast attack. Characters can also use a Plasma Strike, which can cause huge damage to an opponent if it connects on sight, but a Plasma Strike can only be done once per round.

Star Gladiator also introduces the Plasma Combo System. Through a specific string of attacks, a fighter can combo their opponent even if the opponent is blocking. If a character strings together five hits and presses a specific button at the end of the combo, they initiate a Plasma Final, which unlocks a technique that inflicts a large amount of damage upon their opponent if used. This system was discarded in the game's sequel, Plasma Sword.

The arcade mode of Star Gladiator consists of ten fights. Depending on who the player chooses as their character, they will fight against a specific set of opponents. Gore, who serves as the sub-boss of the game is always fought at Stage 9 and Bilstein, who serves as the final boss of the game is always fought at Stage 10. Depending on how quickly the player defeats Bilstein, either the game ends with a false ending or the player is then taken to a special battle against an unplayable computer-controlled true final boss named Ghost Bilstein. Losing to Ghost Bilstein results in both a bad ending and a game over while defeating Ghost Bilstein results in the chosen character's own true ending.

In the future, the growing population of the world led to humanity looking across the stars for new homes.^[3] In the year 2348, humans have been exploring the vast reaches of outer space for four centuries and have established peaceful contact with various alien civilizations. People now emigrate from one planet to another. However, some problems arise with a couple of alien races, so the Earth Federation begins developing a Plasma-power weapon to protect the Earth from any outside threats. Dr. Edward Bilstein, a Nobel Prize-winning German-American physicist for the Earth Federation, uncovers the secret to humanity's "sixth sense": a technique for capturing the energy of the human mind, an energy source he calls "Plasma Power". The Plasma weapon is built, and Bilstein gains fame and fortune for the invention. It is discovered by the Earth Federation that Bilstein experimented on actual human bodies during his research on Plasma Power. He is arrested and exiled from Earth, imprisoned in a satellite that orbits the Planet Zeta, while development of the Plasma weapon is indefinitely suspended. Word of Earth's possession of a super weapon spreads throughout the universe and it reduces hostile confrontations.

Four years later, an Earth Federation army base is attacked and destroyed by a small group of rebels calling themselves the "Fourth Empire". Bilstein, who has built himself a powerful cyborg body and escaped from Zeta, is their leader. Realizing their pattern of attacks is leading back to Earth, a panicked Earth Federation searches for people who can utilize Plasma Power in their own given accord and stop Bilstein before he can conquer the universe with his nascent Fourth Empire. All of Earth's hopes rest in the project codenamed "Star Gladiator".

Hayato Kanzaki (Voiced by Nobutoshi Canna in the series proper, and by Toshiyuki Morikawa in Marvel vs Capcom 2.) The protagonist of the series. A rebellious young Japanese intergalactic bounty hunter who fights with a Plasma Sword while living on his own and caring about others, especially the children living in the orphanage in which he was raised from and his close friends June, Saturn, and Gamof. Hayato's noble love and determination for his friends is the driving force that prompts him to go up against Bilstein and the Fourth Empire. In his true ending, Hayato returns to the orphanage a month later finding the director closing the doors, and presents her with rolls of money. When she sees the money her emotions are torn between love and hate, but Hayato realizes this and asks her not to be made, promising to reform himself from then on. Filled with mixed emotions, the director says to Hayato that he’s going to give her a heart attack, to which Hayato, embarrassed, replies “But if you die … I’ll never change!”

His alternate evil-self known as Black Hayato is originally his alternate costume prior to becoming a separate character in later appearances.

Hayato is one of the few characters in the series to crossover in another Capcom game; in this case, Marvel vs. Capcom 2. Hayato also makes a cameo appearance in Tekkaman Blade's ending in Tatsunoko vs. Capcom: Ultimate All-Stars, while Black Hayato appears as a boss unit in the tactical RPG Project X Zone 2.

June Lin Milliam (Voiced by Megumi Ogata): A talented young British-Chinese rhythmic gymnast who fights with a Plasma Ring to avenge the death of her parents by Bilstein (she is unaware that her father is in fact Rimgal). In her true ending, June returns home to visit the picture of her deceased parents. She says to her parents that she has finally avenged them and notes how for many years all she felt was vengeance, but now feels nothing. She adds that they can now rest in peace, and notes that since she has nothing left she will join them soon. June takes a bottle of drugs off her desk and as she raises it to her mouth and Hayato, thinking that June is about to end her life, Hayato hurries in telling her not to do so, saying to June that he, Saturn and Gamof need her, reminding her that she has a new family now. Hayato's words slowly warm her frozen heart, who asks Hayato what he’s talking about, saying that this is just cough medicine. June runs into Hayato’s arms, while behind June her parents smile from their picture.

June makes cameo appearances in two of the background stages in Super Gem Fighter Mini Mix, the Shanghai stage in Capcom vs. SNK 2, one of Hayato's win poses in Marvel vs. Capcom 2, Hawkeye's ending in Ultimate Marvel vs. Capcom 3 as a member of the new West Coast Avengers, and Deadpool's ending from the same game. She also appears as a playable solo unit in Project X Zone 2, where she is voiced by Yukari Tamura. She was also the first Star Gladiator character to be confirmed for the series.

Saturn Dyer: A green-skinned cone-headed alien who is named after the planet where he comes from in the Andromeda Galaxy of the universe (but not the one present in Earth's Solar System), he fights with Plasma Yo-Yos while having quite an eccentric yet friendly personality. Saturn is a well-known and renowned popular street performer on his home planet, with a clown-like attitude and a perennial ten-mile-wide smile on his face. Upon coming to Earth in order to enjoy his hobby of theater while on a new assignment to research life on Earth, Saturn learns about the threat of the Fourth Empire and joins the Star Gladiator project in order to help protect both Earth and his home planet. In his true ending, Saturn is thanked by the general back at the United Force base for a job well done, to which Saturn replies that the whole “Fourth Empire thing” wasn’t part of his mission, and since they used him, he believes its in his planet’s best interests not to share any information between their 2 worlds. The general is left speechless, but then Saturn (who it seems was actually joking) whispers in his ear that he’s sure they can work something out. A few days later, at the Pompidou Center in Paris (the place Where Saturn first learnt about yo-yos from seeing a performance performed there on a T.V. broadcast he came across)^[4]) Saturn is entertaining people on the streets, surrounded by a crowd.

Saturn makes a cameo appearance in one of Hayato's win poses in Marvel vs. Capcom 2.

Gamof Gohgry (Voiced by Daisuke Gōri): A brown-furred ape-like alien who comes from the forest planet of De Rosa which lies from within the Andromeda Galaxy of the universe, he fights with a Plasma Axe. When Gamof's job as a lumberjack is compromised at the hand of an unknown Earth microbe virus that destroys nearly all of De Rosa's forests. It was discovered that a type of thistle that can only be grown on Planet DeRosa is the raw material for a drug called "White Heaven," which is 3,000 times more potent than heroin. People competed to grow this money-producing plant, and the planet's rich forests were devastated. Although Planet DeRosa's government prohibited cultivation the Earth's drug syndicate had already entered the organization, and even the officials of Planet DeRosa had been taken into the organization, and the law was no longer valid. As a result, the ordinary people of Planet DeRosa were forced to leave their devastated planet and go to work.^[5] Gamof becomes a reluctant bounty hunter and eventually meets up with Hayato, becoming good friends with him. When Gamof learns about the threat of the Fourth Empire, he joins the Star Gladiator project along with Hayato so that he can protect both his home planet and his family.

In Gamof’s true ending, its revealed that a few years after the Final Crusade Gamof had purchased the woodlands with his reward money and decided to return to his peaceful life as a lumberman. However, to ensure that the woodlands are never corrupted again, Gamof forms an organization against drugs. After coming home from a hard day’s work one day, Gamof’s family greets him, with his younger brothers asking him to tell them again the story of the Star Gladiators (Gamof’s favorite story) which he does.

Franco Gerelt: (Voiced by Hisao Egawa) A renowned and honorable Spanish matador, he is an expert fencer and fights with a Plasma Rapier. Seeing the strong potential that Gerelt has from within his fighting skills, Bilstein kidnapped Gerelt's wife and daughter with the help of a rival matador who had envied Gerelt's popularity and skill and coerced Gerelt to follow his command. Bilstein also implanted a bomb in his chest which would be triggered if he disobeys.

In Gerelt’s true ending, Gerelt finds himself in a no-win situation: to free his wife and daughter he would have to destroy the human race to do this, but at the same time he can’t live without them. Gerelt decides to surrender himself to Earth’s United Forces. He receives judgment 2 months later on the crimes he committed, and is astonished when he is sentenced to 5 years in prison, thinking that he would receive the death penalty, and looking up he sees his family. It transpires that through the help of his adoring fans Gerelt’s family was rescued from prison while the truth about how Gerelt was blackmailed by Bilstein is revealed, and a joyful Gerelt runs up to his family and hugs them.

Vector (Voiced by Osamu Hosoi) An emotionless prototype assassin robot created by Bilstein to be the ultimate killing weapon. It fights with a Plasma Gun. Vector's only directive is to seek and destroy every single human being. Vector makes a cameo appearance in Roll's ending in Tatsunoko vs. Capcom: Ultimate All-Stars, in which he is reprogrammed to do household tasks.

Rimgal: June's father, the former English scientist Michael Milliam turned into a Velociraptor dinosaur who fights with a Bone Club after Bilstein experimented on him. Rimgal fights to try and control his transformation. However, Rimgal ultimately fails, and fearing his primal instincts will overtake his human sensitivity and end up having him kill his daughter, Rimgal kills himself in the end. Rimgal is the only regular character not to return in Plasma Sword: Nightmare of Bilstein (along with Kappah, a secret character). In his true ending, Rimgal has entered the last stage of his transformation, and is unable to control the savage dinosaur nature lurking in his mind. Knowing that the next time his inner beast awakens he will never be able to regain true control over his actions, Rimgal makes the ultimate sacrifice. Looking at June and her companions slowly, Rimgal asks them to “Please take care of my daughter. I love her…” and then leaps from the fortress, plummeting to the ground below.

He does not have a voice actor but his roars are provided by Michio Sakurai.

Zelkin Fiskekrogen (Voiced by Hisao Egawa): A blue-feathered bird-like humanoid alien from the Planet Klondike, which lies from within the Andromeda Galaxy of the universe. He fights with a Plasma Claw. Zelkin, who is known for being a brave and noble valiant warrior, fights alongside Bilstein because of his loathing of humans, who nearly destroyed his race during a war. Zelkin is an old acquaintance of Hayato.

In his true ending, Zelkin is shown to have come to the realization that not all of Earth’s people are cruel and brutal, and reflects that he has made a horrible mistake, and that him defeating Bilstein can’t make up for wronging the humans so terribly. Although Zelkin tries to give himself up to Hayato and the other earth warriors they don’t accept his surrender, with Hayato telling Zelkin that now that they’ve fought him they know he is not the enemy. Hayato tells Zelkin to go home, thinking that this might bring peace between their two peoples. The other Earth warriors agree with Hayato. Zelkin expresses his gratitude and heads off to his home planet on a spaceship from Zeta. On his way back Zelkin reflects “So this is what they mean by ‘Forgive.’ I am only now beginning to understand. We have much to learn from our human brethren.”

Gore Gajah: A big-brained pointy-eared tanned Indonesian who fights with a Plasma Mace. Gore, a genius magician, seeks to gain knowledge about Plasma Wizardry and joins Bilstein's Fourth Empire in order to advance his studies into Plasma Power. According to Japanese materials, Gore's alien-esque appearance is due to the side effects of the constant abuse of Plasma Wizardry, which had deformed him into his current state.^[6] In his true ending, Gore announces that he is bored with the Fourth Empire, believing that it offered him no challenge and was a waste of his time; seeking only to play with his “favorite new toy;” the human race, whom Gore thinks of burning. The narrative text notes that when Gore next stands on the Earth’s ground, “humans will face the real demon.”

Dr. Edward Bilstein (Voiced by Daisuke Gōri): The antagonist of the series. A Nobel Prize-winning German-American prestigious physicist and cybernetic mad scientist emperor who fights with a Plasma Broadsword. Bilstein stumbled upon a research document left behind by one of his ancestors. It described Plasma Power and how it could be derived from human emotions. After escaping his prison and forming his "Fourth Empire" organization while placing himself in a powerful cyborg body, Bilstein seeks to conquer the entire universe and establish a new order. This form of Bilstein, who would later be known as "Ghost Bilstein", makes a cameo appearance in Tekkaman Blade's ending in Tatsunoko vs. Capcom: Ultimate All-Stars, when he is attacked by Ghost Bilstein and saved by Hayato, who teams up with Tekkaman Blade to beat him.

Kappah Nosuke (Voiced by Kazumi Tanaka): A green-skinned turtle-like humanoid alien from the Planet Kappa, which lies within the Cygnus Galaxy of the universe. He fights with a Plasma Spear. Kappah is based on a Kappa, a type of water sprite that inhabits various ponds and rivers throughout most of Japan. Kappah and his race have a militaristic lifestyle; all of them despise peace and friendship, living only for war and fighting. This leads him to join Bilstein and the Fourth Empire, who promise to defend his home planet from any outside threats. Kappah plays very similar to Gerelt barring a few specials, although the characters are in no way related. Also, Kappah does not have a character select screen portrait in favor of a zucchini pair image. A sub-boss and secret character.

Blood Barbarians: A robust young American expert swordsman who fights with a Plasma Broadsword. Blood was taken in by Bilstein at a very young age after Bilstein himself had killed Blood's parents; Blood had the highest amount of Plasma Power stored in his body, and Bilstein wanted to use his potential on his Plasma Power research. Blood plays similarly to Bilstein, barring a few specials. A sub-boss and secret character.

Super Bilstein: Bilstein's greater form and the true final boss of the game.

The events of Star Gladiator take place over the following 11 stages:^[7]

Stage 1 "Earth Federation Forces Headquarters Communication Elevator" This is an elevator that connects the Earth Federation Forces Headquarters, floating 3000m above the earth, to the ground, and a powerful magnetic flux field motor allows it to move at a maximum speed of 200km/h.

Stage 2 "New Tokyo Downtown" In the year 2348 AD, the Japanese economy is in decline and the capital Shin-Tokyo has become dominated by companies from other nations. New Tokyo is filled with unemployed people, while downtown has become a hotbed for criminals. Here Hayato and the mercenaries do their final training (distraction) before the battle.

Stage 3 "Earth Federation Forces Spaceport" This is a military relay station for shuttles heading out of the atmosphere and airplanes flying around the earth. It is here that Hayato and his friends gather to begin a plan to defeat Bilstein as the "Star Gladiators".

Stage 4 "Interstellar spacecraft launch base" This is a transfer base for interstellar spaceships heading to the inner galaxy and further outer space from a shuttle that connects with the earth. Combat exercises in outer space, which can’t be done on Earth, are constantly conducted here, and from here Hayato and the others board a ferry heading for Planet Zeta.

Stage 5 "Cargo space inside the interstellar transport" This is a warehouse inside the regular unmanned transport ship bound for Planet Zeta, and Hayato hides in a camouflaged container and plans to invade Planet Zeta. Although the containers appear to float in disarray they are connected safely by magnetic flux wires.

Stage 6 "Fourth Empire Reconnaissance Plane" This is a reconnaissance plane of the Fourth Empire army that is sent by Bilstein who noticed Hayato's presence, but Hayato and his friends hijack this and attempt to invade Imperial Army territory all at once.

Stage 7 "Fourth Empire Frontline Radar Base" This is a radar base of the Fourth Empire's army that explores space near the Zeta planet, which Hayato and his friends first destroy in order to allow the main body of the Federation army to follow.

Stage 8 "Fourth Imperial Army Base Vent" As the Imperial Army base is protected by powerful defensive weapons, Hayato and his friends try to break through the relatively weakly defended vent. However, it is still a dangerous place with scorching sand and gusty winds.

Stage 9 "Fourth Empire Biological Laboratory" This is a biological laboratory located inside the Imperial military base, where many innocent people from Planet Zeta were killed in horrific experiments, and it is Hayato's mission to quickly rescue the people trapped here.

Stage 10 "Atop the 4th Imperial Base" The top of the Imperial Base, which Bilstein tries to escape on, can be floated by an anti-gravity plasma engine, but Hayato and others catch up on the verge of jumping, and here the decisive battle with Bilstein begins.

Special stage "Bilstein's Spiritual World" Bilstein, injured and unable to fight, sends his intense thought power (plasma power) into Hayato's head and challenges the final battle in the spiritual world. As this thought completely controls the opponent's brain cells, losing the battle here means death.

In an interview with Destructoid.com, Capcom's former senior manager of community Seth Killian mentioned that Star Gladiator was originally designed to be a Star Wars game with Star Wars characters.^[8]

In Japan, Game Machine listed Star Gladiator on their September 1, 1996 issue as being the sixteenth most-successful arcade game of the month.^[14] A Next Generation reviewer called Star Gladiator "a quirky, stylish game that is more subtle than obvious, with innovative gameplay and likeable character design." He especially praised the ability to move, attack, and defend in three dimensions, and the "intuitive and simple" controls for executing these moves.^[12] GamePro approved of the game's graphical effects, unique combo system, and characters, and deemed it a satisfying first foray into 3D for Capcom.^[15]

The PlayStation conversion also received positive reviews, with critics almost universally praising the characters and the variety of their fighting techniques,^[10][11][16] as well as the game's graphics, particularly the 3-D animated backgrounds.^{[10][11][13][16]} The most common criticism was that the game is too easy in single-player mode.^[10][16] GamePro said that Star Gladiator's "visual appeal and outstanding control will put other 3D games on their backs."^[16] Next Generation was more moderate, saying that Star Gladiator "is a pretty good game all on its own", but is more of a harbinger of the more outstanding 3D fighting games they anticipated Capcom would put out in the near future.^[13] GameSpot assessed that "All in all, the surreal alien characters, weapon-based fighting, and overall quality make Star Gladiator yet another peal of the thunder in the resounding Capcom storm."^[11]

The PlayStation version of Star Gladiator held an aggregate score of 82% on GameRankings based on five reviews.^[9]

• Plasma Sword: Nightmare of Bilstein

• Official Japanese website (includes character biographies)
• Star Gladiator at MobyGames
• Star Gladiator at the Killer List of Videogames