Forza Motorsport 4 is the fourth installment in the Xbox exclusive race simulation series. It holds many car and race licenses and allows players to race in a realistic setting. The main career mode is now called World Tour Mode and takes players to different races on locations all over the world. Opponents now have adaptable AI based on the player's performance. A lower difficulty also no longer leads to less power for the opponents' cars. Instead, they are given less confidence going into corners. This means that players are encouraged to outbrake them instead rather than overtakes on a straight section. Next to the original races, known game modes such as bumper to bumper, drift, autocross, and multiple-heat are still present. In the rivals mode players race against friends and online players, even when they are offline, by trying to beat the time of their ghosts. Players earn credits by beating them at different events, and the bonus is determined by the rival's position on the leaderboard and the size of the board.

Cars no longer level up like in a previous entries. Instead, players receive manufacturer specific upgrades, called affinity levels. There are 50 levels for each manufacturer and they apply to all cars for that certain manufacturer, regardless of the specific car. There are three new real races added to the franchise: Hockenheimring, Indianapolis Motor Speedway and Infineon Raceway, along with a fictional one: Bernese Alps. Compared to previous versions the amount of simultaneous players has been doubled from 8 to 16, both offline and online. Players can create clubs and share cars in garages among club members.

Players can import their Forza Motorsport 3 profile and transfer in-game credits and gifted cars. Next to the classic controller mechanism, gestures-based control is also available through support for the Kinect peripheral. Kinect is used to change the perspective based on head tracking (looking in a certain direction) while steering is done by moving hands in the air while acceleration and braking is done automatically. Both control mechanisms can be combined to navigate cars with a regular controller together with the Kinect-based head tracking. A feature called Autovista allows players to walk around and explore a vehicle using Kinect. It is however only available for a limited amount of cars.