In City Tycoon players assume the role of businessmen investing their own capital in expansion of the city. Their main purpose is to increase the standard of living, and thus the happiness of its citizens. They have within reach a whole range of projects that the city council wants to achieve, but which lack the funds. By skillfully selecting plans, using available space and deciding which projects their money should be spent on they will be expanding the city and competing for the title of the most people-friendly company.
During play, the game board is expanded by players laying down tiles, with each tile representing a piece of the city, a district that might need to be provided with electricity or water in exchange for receiving some benefit. Some of the tiles require a supply of luxury goods; others generate them; others give only points of happiness, such as the hospital.