In Lego Loco, you build and design a town with lego buildings, and then build railroads to transport the people. You can also build roads so people can use their cars. You get to choose where everything goes and you can also pick people up and move them around. Another feature is the ability to send postcards. At the start of the game, the player has a "Toy Box", from which they can select buildings from lists and place them directly into the space provided. The player can put down roads, railway lines, stations, crossings, buildings and scenery. To start the simulation, the player must close the Toy Box and the town will come to life (though the player can open it again to make changes, save the town, or open a new one). After a while Lego figures will begin moving into the houses provided (if any), and the player can, like with ordinary figures, pick them up and place them elsewhere. This can affect the figure's mood, depending on where it's placed. Using the train house (engine shed), the player can create trains to run on the railway lines. If a train has passenger carriages it will stop at any stations that have been placed alongside the track. The player can control the train's speed and direction and add a mail carriage to the train, thus enabling it to carry postcards that have been created by the player. The train or trains can also go through tunnels that the player can place at the edge of the map, and some tunnels can be used to help exchange postcards with other players (provided a network has been set).