Like many scrolling shooters, the player initially has a basic shot, which can be upgraded and/or exchanged for different weapons, as well as gain smaller ships that follow the player's ship around and copy its attacks. As is usual, these power-ups are distributed throughout the levels and are lost entirely when the player loses a life.

Two additional mechanics differentiate Arrow Flash from similar scrolling shooters, one of which is that the ability to transform the player's ship. The two forms available are a humanoid mecha form and a typical jet form. The player's weapons change depending on the form. The jet form only shoots forward but intensely, while the mecha form can fire diagonally and sometimes even from the back; helper ships mimic the jet's actions but stay in a fixed formation behind the mecha. The jet form is also faster than the mecha, but both can be killed by only one hit unless the player picks up an energy shield which can sustain three hits. The game's titular "Arrow Flash" is a highly powerful attack for each form; the jet fires five large blasts forward, while the mecha form becomes engulfed in flame, rendering it immune to attack for a short while. Depending on the options set at the start of the game, arrow flashes are either required to be charged up with the unlimited use or collected out on the field at no charge time.