Capture the Chao is an event that takes place in different arenas rather on race tracks. The goal of the player is to collect balloons designed like Chao, who appear in various places around the arena. Shortly after the event has begun, a Chao balloon will be spawned. This Chao balloon will be surrounded by a yellow aura that allows it to be easily spotted from a distance. In addition, a white target marker will appear on the screen that shows the player where the Chao balloon is when it is out of sight. This target marker will turn red when an opponent has collected the Chao balloon.
To collect a Chao balloon, the player has to touch it. The Chao balloon will then be attached to the player's car. The player's next objective is then to take the Chao ballon to a UFO that will appear in another area of the arena. If a player falls off the arena or takes damage along the way however, they will drop the Chao balloon, allowing other players to pick it up. Should the player successfully deliver the Chao balloon to the UFO, the player receives one point. The event ends after one of the players has scored the required amount of points. This player will also be declared the winner of the event.
Capture the Chao can only be played in the game's multiplayer.