Likened to The Sims, Animal Crossing and Harvest Moon, the game tasks the player with turning a neglected plot of land into a beautiful garden. As with many sandbox games, the game is open-ended, with no strict winning or losing requirements. Instead, players are guided only generally towards the objectives of increasing their garden's value and attracting piñata residents. Players are free to determine their own sub-goals and work towards them.

Developing a successful garden requires setting up the land and foliage appropriately to attract piñatas, as well as purchasing various items to place within the garden (e.g., homes for the piñatas). When certain requirements are fulfilled, the garden will attract a simple black-and-white version of a given piñata species. After fulfilling additional requirements, the piñata will become a resident, changing into a full-color version. Once two piñatas of the same species are residents and their mating (romance) requirements are met, they can perform a romance dance, resulting in a baby piñata egg. No piñata has a gender specific design, and hence any two piñatas of the same species can mate (with some hidden inter-species romances possible as well).

When piñatas get together to mate, a maze-navigation minigame is initiated. Completing the mating minigame successfully will result in the creation of a new piñata offspring. For species encountered early in the game, the minigames are simple, but as the game progresses, minigames become increasingly difficult. The difficulty also increases as more members of a given species are resident, so that players have fewer lives (in the minigame) for each piñata of that type already in the garden.

In addition to looking after the needs of their piñatas, players must also watch out for Ruffians and sour piñatas, who enter the garden with the sole intent of wreaking havoc. Their mischief includes eating fruits or vegetables, destroying objects, or causing resident piñatas to become ill. If the player is resourceful, sour piñatas can, however, be won over and turned into productive garden residents. Additionally, players can earn or purchase individual parts of a totem-pole like structure known as the "Tower of Sour" to deter the type of sour piñata each part corresponds to. Different parts of this become available as the player completes certain requirements. In order to keep out Ruffians (and their leader, Professor Pester), players can purchase a "Captain's Cutlass" from one of the merchants.

Each piñata which is a resident of the garden can be customized as the player sees fit. Customization options include:

* The name of the piñata.
* The piñata's decorative tag (which stays with it, wherever it goes).
* A multitude of accessories the player can purchase for their piñata, ranging from hats, to backpacks, to large teeth. These accessories can increase a piñata's value, or can grant the piñata additional abilities. Customizations, including accessories, are lost if a piñata is broken (Viva Piñata's version of death) for any reason, including being eaten by another piñata, being hit with a shovel, or after being sick for an extended period of time.