Although vulnerable when outside, Albert is able to reach areas the wanzer cannot, in addition to being a smaller target and being able to jetpack indefinitely. At any time during a stage, Albert can eject from his heavily armed wanzer to explore. The wanzer is able to jump, and attack with a primary and a special weapon. Once inside a stage, the player controls Albert and his wanzer as it moves left, right across the screen. The player moves between different stages on an area map. Gameplay is more than a little similar to Cybernator or Metal Warriors. Gun Hazard is a side-scrolling shooter with strong RPG elements, and a spin-off of the Front Mission series.

A young Wanzer pilot, Albert Grabner, is assigned escort duty to the president by loyal elements of the army stationed there. Tipped off to the rebellion, Orwen seeks to flee from Bergen, looking for safe passage out of the seaport of Port Ertothal. Seeking to establish complete control over the government and the NORAD units stationed there, Ark's first step involves the capture of President Orwen.

For the small nation of Bergen, a coup d'etat is underway, staged by Colonel Ark. In this world of conflict and change, the Walking Panzer, or Wanzer, (a form of mecha) becomes the standard armored unit for wars and petty battles across the globe. The government alliance that had supported the building of ATLAS now find themselves facing economic crisis as the balance of power shifts. The year is 2064, when the great solar power satellite, ATLAS is overshadowed by the invention of fusion power.

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