After saving Haven City once again, Jak and Daxter find themselves poisoned forced into competition on the international car-racing circuit by the execution of Krew's will. Featuring over a dozen customizable vehicles designed with unique handling characteristics, players will race their whip through 20 tracks in eight different terrain arenas. With an assortment of power-ups available, including projectile weapons, mines, ranged weapons, turbo boosts, shields, and smart bombs, players should have the means necessary to ensure they're the first to cross the finish line. The game supports both offline and online multiplayer. Offline multiplayer is the typical two-player split-screen multiplayer. Online multiplayer is playable with up to five other players. Both modes feature the same game types, which are the same as the single player except that human players are replacing the AI.

Taking place one year after Jak 3, Haven City has been steadily rebuilt after the defeat of the Dark Makers, Metal Head and KG Attacks. Combat racing became a sport over time in the dangerous Kras City. Jak, Daxter, Ashelin, Samos, Keira, Torn and Sig (Who does not attend) receive an invite to the reading of Krew's last will, as does his daughter, Rayn. After offering a toast, Krew reveals in a recording that everyone present has been poisoned with black shade. Krew gives an ultimatum: the only way to obtain the antidote is for everyone to race and win at the next Kras City Grand Championship. As Jak and friends progress through each race, they find that another crime syndicate led by the mysterious Mizo has it in for Jak. Eventually it is revealed that Krew and Mizo made a deal before the events of Jak 3: both gangs were to make their own racing teams and the loser of the Kras City Championship will submit, making the winner the sole crime family in Jak's world.