Like in the original Asteroids the objective is to score as many points as possible by destroying asteroids and flying saucers. The asteroids come in three different sizes. If the player fires at and hits a large asteroid, it breaks into medium size asteroids. If the player fires at and hits a medium asteroid, it breaks into small asteroids. If a player fires at and hits a small asteroid, it disappears. Different points are awarded for hitting each size of asteroid, and for hitting flying saucers. The player controls a ship that can rotate left and right, fire shots straight forward, and thrust forward. Asteroids Deluxe replaces the hyperspace feature with shields which deplete with use. Other differences include asteroids which rotate and a new enemy which is dubbed a "killer satellite" which would, when shot, break apart into three smaller ships that homed in on the player's position. The screen of the game is wrapped both vertically and horizontally so that if any object moves past the top edge of the screen it reappears on the bottom edge at the same lateral location, and if it moves past the left side of the screen, it reappears on the right side of the screen in the same vertical location.

Asteroids Deluxe swaps vector graphics of the original for bitmaps.

In 2007, AtariAge self-published a cart release of Asteroids Deluxe for the Atari 7800.