In Tropico 4 the player takes the role of the dictator of a (fictional) tropical island. The gameplay mechanics are very close to the predecessor Tropico 3: the player builds up the island so it functions both economically and politically. And of course he also needs to ensure his own maintenance of power.

The start of a game offers the usual traits of games of this genre: constructing buildings which are used for different purposes, e.g. mining, schools, hotels or army training. Those are needed to build up production cycles and fulfill the needs of state and people. Depending on the island it may be needed to concentrate on production or tourism. Later, when the economical basics are covered, the game shifts to politics and optimizations. Different countries will have requests, e.g. building a military base or allowing atomic tests, or the people have additional demands. How the player handles those matters, have a big influence on diplomatic relations and the people's content.

The latter is especially important because angry people strike or become rebellious. This can result in unwanted outcomes in (optional) elections or even an attack on the palace. This is the reason why it is important to have an army at hand, even if there are no real war situations in the game. The player does not control his army; only his avatar. This avatar can be controlled directly and perform special tasks, depending on his abilities. The game features a campaign with 20 missions (including scripted events with political decisions) and a free playing mode.

The main additions to the predecessor are a new trading system, 20 new buildings, new disasters and the already mentioned request system.