The original game, first published in 1981, uses mechanics from Basic Role-Playing, and is set in the 1920s, the setting of many of HP Lovecraft's stories. In keeping with the Lovecraftian theme, the gamemaster is called the Keeper of Arcane Lore (or just ‘Keeper’), while player characters are called ‘investigators’.

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​The players take the roles of ordinary people drawn into the realm of the mysterious: detectives, criminals, scholars, artists, war veterans, etc. Happenings begin innocently enough until more and more of the workings behind the scenes are revealed. As the characters learn more of the true horrors of the world and the irrelevance of humanity, their sanity inevitably withers away. The game includes a mechanism for determining how damaged a character's sanity is at any given point; encountering the horrific beings usually triggers a loss of Sanity points. CoC has a reputation as a game in which it is quite common for a player character to die in gruesome circumstances or end up in a mental institution.

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​CoC is skill-based, with player characters getting better with their skills by succeeding at using them for as long as they stay functionally healthy and sane. They do not, however, gain hit points and do not become significantly harder to kill. The game does not use levels, in comparison to something like Dungeons and Dragons. It uses percentile dice (with results ranging from 1 to 100) to determine success or failure. Every player statistic is intended to be compatible with the notion that there is a probability of success for a particular action given what the player is capable of doing. For example, an artist may have a 75% chance of being able to draw something (represented by having 75 in Art skill), and thus rolling a number under 75 would yield a success. Rolling ​1⁄5 or less of the skill level would be a "critical success" and would yield some extra bonus to be determined by the Keeper.

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Eventual triumph of the players is never assumed …