Plankton has hypnotized the jellyfish at Jellyfish Fields. SpongeBob must de-hypnotize the jellyfish by jumping on the hypno-pods. Jumping on a hypno-pod de-hypnotizes all nearby jellyfish. Hypnotized jellyfish will sting SpongeBob, but SpongeBob can pick up de-hypnotized jellyfish for points. If a hypnotized jellyfish stings SpongeBob, he will lose some health. If he loses all his health he loses a life. There is also a timer and the level must be completed before the time runs out or SpongeBob loses a life. There are also power-ups. The squarepants give SpongeBob an extra life, the Krabby Patty gives SpongeBob more health and the stopwatch gives SpongeBob more time. If SpongeBob loses all his lives the game ends.
On the game over, jellypants screen, SpongeBob can heard saying, "Aww, barnacles." This line is reused from "Walking Small." The voice clip played when an extra life is collected is also from that episode, during the short "Steppin' On the Beach" scene.
The sound effect when SpongeBob smirks in "Jellyfishing" plays when a Krabby Patty is collected.