In ancient Greece, a Centurion who had died in battle is resurrected from the dead by Zeus. The Centurion is ordered by Zeus to save his daughter Athena, who had been kidnapped by Neff. To become able to withstand the perils, the warrior gets the ability to collect three spirit balls from albino wolves on each level, the last of which transforms him into a human/beast hybrid of formidable power.

After a series of battles, the centurion finally defeats Neff and rescues Athena. In the original arcade game, the end credits are interspersed with images of actors in costumes for the different characters and monsters of the game, implying the whole game was a film production.

Altered Beast is a side scrolling, platform, beat 'em up game. The player can punch, kick and jump. Up to two players can play at once. Each player controls a Centurion, fighting undead creatures and monsters in a setting resembling Ancient Greece, with originally five levels, in a graveyard, the underworld, a cavern, Neff's palace and base at the city of Dis. One of the enemies, a white two-headed wolf (blue in the Mega Drive version, and a blue ox in the DOS version) upon defeat releases a Spirit Ball, a power-up orb which increase the strength and size of the player character. Three orbs turn the centurion into a beast, which in the original version are a werewolf, a thunder weredragon, a werebear, a weretiger, and the more powerful gold werewolf (the Japanese Famicom version also include a lion, shark and phoenix form). Each beast has its own abilities, such as the dragon's flight and lightning, and the bear's petrification. After becoming the beast, the character can face the end-level boss, which upon defeat causes Neff to appear and remove the transformation orbs.

Altered Beast was ported to several platforms after its original arcade release in 1988. It was released for Sega Master System, PC Engine, PC Engine-CD, Famicom (NES), Atari ST, ZX Spectrum, Commodore 64, Amstrad CPC, Commodore Amiga and DOS, release in 2009 for PS3 and Xbox 360. The Sega Mega Drive/Genesis version was the original pack-in game for that system in North America, Europe, and Brazil, before being replaced by Sonic the Hedgehog. A hand-held version of the game, made by Tiger Electronics. it was released in June 1988 for Sega Genesis, and it was released for the PS3 and Xbox 360 in August 2009.

Certain differences are seen between the several versions of the game. Some of them, like the Master System one, were only single player and had only four levels. Others provided different beasts to mutate into, such as a humanoid lion or a shark form seen in the NES version.

The Mega Drive version is included in the compilations Sega Smash Pack, Sega Genesis Collection and Sonic's Ultimate Genesis Collection, with the latter two also including the arcade version as an unlockable game. The Wii's Virtual Console service offers emulated versions of both the arcade and the Mega Drive port, while the Xbox 360's Xbox Live Arcade and the PlayStation 3's PlayStation Network have a re-worked arcade version with HD support, online leaderboards and network play. Sega released an official iOS port of the Mega Drive version in late 2010, played on the iPhone and iPad.

The game has also seen a 3D port for the Nintendo 3DS as a digital download. It retains the original game and local multiplayer, and also features a new mode with random transformations. It is based on the Mega Drive / Genesis port, not the arcade version. It also appears in Sega 3D Classics Collection for the Nintendo 3DS.

This game also has been emulated for free on iOS and Android devices for Sega Forever in 2017.

This game became one the 53 Sega Genesis/Master System games in Sega Mega Drive/Genesis Classic Collection for Sony PlayStation 4, Microsoft Xbox One, and Nintendo Switch.