

After regaining consciousness, Sonic finds himself in a strange dimension known as White Space, a realm where time and space end up after they have been 'erased' by being drained of color and life. Sonic tries to stop the monster, but is easily overwhelmed by its power. In the present day, Sonic celebrates his birthday with his friends until the Time Eater disrupts the party, sucking everyone through various "time holes" and scattering them across different points in Sonic's past. Suddenly, the mysterious entity known as the Time Eater appears in the sky and the screen washes white. In the past of Green Hill, Classic Sonic is running until he hears a noise. The game's plot takes place following the events of Sonic Colors, in which Sonic the Hedgehog defeats Dr. Act 1 is played as Classic Sonic and Act 2 is played as Modern Sonic, and there are ten missions per level. Some bosses are played as Classic Sonic, and some are played as Modern Sonic. The handheld version, unlike the console version, makes the Modern Sonic gameplay similar to Sonic Rush, while also featuring Special Stages based on Sonic Heroes. Bosses are accessed through special areas known as "Boss Gates", found at the end of each era.

Also, there is an area above the entrance to the main stages where the player can access Challenge Acts and rival battles. Characters rescued will stand outside the entrance to the stage, and they can be talked to. The Hub worlds are only playable in 2D, so they are not free roam like they were in Unleashed. The hub world starts out at White Space, but opens up more as the Sonics pass through more levels. Five can be found in each Act, and collecting them unlocks extras such as music, art, and movies. Red Star Rings return in the console version. Modern Sonic's levels, on the other hand, carry on the current modern 2D/3D gameplay of recent titles such as Sonic Unleashed and Sonic Colors, featuring the Homing Attack, Freestyle Tricks, a Drift, the Stomp, the Light Speed Dash, and the Sonic Boost. Classic Sonic's levels are strictly two-dimensional side-scrolling stages, using classic moves like the Spin Attack and the Spin Dash. Each level can be played with either Classic Sonic or Modern Sonic, each taking their own routes throughout the level. There is a level taken from each mainstream Sonic game to represent the different times. The game features levels derived from twenty years of Sonic history, ranging from the Classic era, through the Dreamcast era, to the Modern era.
