The player starts with a plot of land – equivalent to a 2-by-2-kilometer (1.2 mi × 1.2 mi) area – along with an interchange exit from a nearby highway, as well as a starting amount of in-game money. The player proceeds to add roads and residential, industrial, and commercial zones and basic services like power, water, and sewage to encourage residents to move in and supply them with jobs.
As the city grows beyond certain population tiers, the player unlocks new city improvements, including schools, fire stations, police stations, health care facilities and waste management systems, tax and government edicts, mass transit systems, and other features for managing the city. One such feature enables the player to designate parts of their city as districts. Each district can be configured by the player to restrict the types of developments permitted or to enforce specific regulations within the district's bound, such as only allowing for industrial sectors devoted to agriculture, offering free public transportation to residents of the district to reduce traffic, raising or reducing taxes for the various classes of development, or, with the Green Cities DLC, imposing a toll for fossil-fuel vehicles entering a district while excluding hybrid and electric vehicles, akin to some forms of congestion pricing.
The game also features a robust transportation system based on Colossal Order's previous Cities in Motion, allowing the player to plan out effective public transportation for the city in order to reduce traffic congestion and generate transit revenue. Roads can be built straight or free-form, and the grid used for zoning adapts to the shape of the adjacent roads; cities need not follow a traditional square grid plan. Roads of varying widths (up to major freeways) accommodate different traffic volumes, and variant road types (for example, avenues lined with trees or highways with sound barriers) offer reduced noise pollution or increased property values in the surrounding area at an increased cost to the player. The road system can be augmented with various forms of public transportation such as buses, taxis, trams, elevated trains, ferries, and subway systems.
Modding, via the addition of user-generated content such as buildings or vehicles, is supported in Cities: Skylines through the Steam Workshop. The creation of an active content-generating community was stated as an explicit design goal. The game includes several pre-made terrains to build on and also includes a map editor to allow users to create their own maps, including the use of real-world geographic features. Mods are also available to affect core gameplay elements; pre-packaged mods include the ability to bypass the aforementioned population tier unlock system, unlimited funds, and a higher difficulty setting.