In addition to adding new objects to the game the main feature of The Sims: Vacation is that adult sims can at any time call for a cab to Vacation Island and everyone in their household will leave for vacation. While on vacation sims do not get paid and cannot work, although they also will not be fired from being absent from their work, however taking a vacation costs a household 500 simoleons in addition to any money they may spend on Vacation Island. When sims wish to return home they can call a cab on Vacation Island to return them to their neighbourhood.
When the household reaches Vacation Island the player has to select which of the lots they will stay on, although they may move lots at any time for no cost. Vacation Island consists of a beach area, a wooded area and a snowy mountain area, and within each of these areas there are three default lots; a luxurious resort lot, a lot with very few amenities and a lot that with facilities somewhere in between the two extremes.
On lots with better facilities sims can eat by using buffet tables, however on lots with simpler amenities sims may eat by renting picnic baskets or using barbecue grills, although all of these methods require that sims pay for their food. Another major difference between lots is that on more expensive lots sims must pay for a room key which gives their family access to hotel rooms on the lot, while on more basic lots sims must rent igloos or tents to sleep in. While more basic lots have porta-potties and resorts have bathroom stalls there is essentially no difference between the two services, however two of the basic lots don't have showers or baths for sims. Vacation lots do have janitors to clean up messes and more pricey lots also have maids. If The Sims: Unleashed is installed all vacation lots will have facilities for pets.
Which part of the island sims are on will affect what kind of activities they can participate in to raise their fun and social needs. Activities on the island include building sandcastles or snowmen, having water balloon or snowball fights, skateboarding, snowboarding, swimming, fishing, archery, playing carnival or arcade games, playing volleyball and going treasure hunting with metal detectors. Which area sims are in also affects what clothing they wear, if they are in a beach area they wear swimwear, if they are in a wooded area they will wear their normal clothes and if they are in a snowy area they will wear winterwear, a new set of clothing introduced to the game with The Sims: Vacation. Sims may take souvenirs bought on the island, found through treasure hunting or fished up from lakes and ponds back to their homes.
- Similar expansion packs to The Sims: Vacation were made for The Sims 2 and The Sims 3, called The Sims 2: Bon Voyage and The Sims 3: World Adventures respectively.
- Although they are almost entirely aesthetic each different area of Vacation Island features a mascot on all its lots. In the beach area the mascot is Marky Sharky, in the wooded area it is Archie Archer and in the snow area it is Betty Yeti. It is notable that Archie Archer bears some resemblance to Robin Hood and that Betty Yeti appears in TV cartoons and on a movie poster if The Sims: Superstar is installed.
- One of the carnival games in The Sims: Vacation is called 'Whack-A-Will'. It is a whack-a-mole like game where sims have to hit a model of Sims creator Will Wright which pops up from a SimCity-like cityscape.
- Much like in the Downtown neighbourhood from The Sims: Hot Date, on Vacation Island the Loch Ness Monster can occasionally be seen appearing in the ocean.