The game centres on a boy called Lee and his faithful dog Ralph. We're introduced to Lee from the dog's perspective after waking up to find his owner sleepwalking through his bedroom window. Ralph leaps after him and the player then takes control of what happens next. Throughout the game Lee will relentlessly walk in the direction he is facing, the problem is there are objects and pitfalls in his path that can ultimately wake him up or even kill him. The player can monitor Lee's sleep level with a bar at the top of the screen. If the bar reaches zero, Lee wakes up and the player loses a life. If this happens three times the game is lost. The player controls Ralph the dog in order to manipulate either Lee, or the objects he is likely to walk into, to see him safely to the end of a level. The frequency of these pitfalls increases as each level progresses and, as it does, the player has to spend more time strategically neutralising threats, far in advance of Lee's actual position in the level. Although it is possible for Lee to die, resulting in a loss of life and restart of the level for the player, Ralph is invincible, surviving otherwise fatal incidents with comedic effect. If all the levels are successfully completed Lee finally returns to his bed and crawls back in.
The game was made to promote the charity Comic Relief. All profits from sales of the game went to the charity. Many references to Comic Relief were made.
Lenny Henry, who is heavily connected with the charity, was cast as Ralph's voice in the games animated introductions.
The Ocean Software logo was animated to include a red tomato being thrown at it with the charity logo stamped on top of the resulting mess. The phrase "Comic Relief or som'ing" voiced by comedian Harry Enfield was then heard.
The opening title of the game features Lee and Ralph moving from left to right and then right to left inside the letters of the word 'Sleepwalker'. Each time they move from right to left, they are seen wearing red noses.
Letters can be collected that spelled out the word 'COMIC' at the top of the screen. An extra life is awarded for successfully collecting all five letters.
A whoopee cushion features in the game as a bonus object, and picking it up gives Ralph a limited period of invulnerability.