In X-COM: UFO Defense, players engage in two distinct modes: strategic management and tactical combat. The strategic mode, known as Geoscape, allows players to manage X-COM bases, research technologies, and recruit personnel, while the tactical mode, or Battlescape, focuses on commanding soldiers in combat against alien forces.

The storyline of X-COM: UFO Defense revolves around the formation of the Extraterrestrial Combat Unit (X-COM) to defend Earth from a series of alien invasions and abductions. Players must uncover the mystery behind the alien threat while protecting humanity.

X-COM: UFO Defense stands out with its blend of real-time strategy and turn-based tactical gameplay, as well as its permadeath feature for soldiers, which adds a layer of emotional investment and strategic depth to the game.