The main focus of the game is to bring more realism and authenticity to the series with many new features, breaking away from the arcade-like gameplay that earlier games in the SmackDown! series possessed. As well as the addition of the new Buried Alive and Fulfill Your Fantasy matches, the game also included two new modes: General Manager and Create-An-Entrance.
This game is the first time a game in the SmackDown! series that was published for a handheld console, as it was released on the PlayStation Portable. It is also the last game in the series to be released exclusively for the PlayStation consoles. It is the best selling game for the PlayStation 2 console out of the series. A steelbook version of the game was released exclusively in Australia.
A new momentum bar has been introduced to determine the flow of the match, replacing the old clean/dirty and SmackDown! meters. If the player chooses their wrestler to fight clean, he/she will be portrayed as a face, If they choose fight dirty, he/she will be portrayed as a heel. The player also has to deal with a stamina bar, which drains as the wrestlers fights; the more elaborate the move, the more the wrestler will be tired. However, this is an optional feature and can be removed in the options menu. The player has to regenerate their stamina bar to prevent becoming completely exhausted and unable to perform. Each character also has a new stamina attribute, making those with a low stamina rating tire more easily. Also included is a new Hardcore attribute, allowing those rated high to inflict more damage to their opponent with weapons.
Grapples have been improved, with each character having more specialized grapple types than the previous game's unchangeable group of four grapples. Each character has choice of three out of seven grapples: Power, Speed, Technical, Brawler, Martial Arts, Luchadore, and Old School. Each character has as well a Clean/Dirty grapple and a Submission grapple, making the total of grapples five. A new power Irish whip has been included, giving more offense to the opponent but at the price of draining more stamina.
The game includes the SummerSlam, Backlash, ECW One Night Stand, Royal Rumble, No Mercy, No Way Out, Judgment Day, Unforgiven, New Year's Revolution, Vengeance, The Great American Bash, Taboo Tuesday, Survivor Series, and WrestleMania 21 PPV arenas, as well as the WrestleMania IX arena. There are also arenas based on each WWE television show (RAW, SmackDown!, Heat, and Velocity).