This stage has some references to other stages, like Hydrocity Zone, Jungle Joyride, Ocean Palace and Labyrinth Zone. It is exclusive to the PS3, Xbox 360 and PC versions. Modern Sonic speeds through this zone along looping alabaster highways and aquaplaning over the water as in Adabat, and may choose to either jump along the backs of giant turtles or drive a go-kart on a suspended road. Classic Sonic, meanwhile, takes to the submarine underground in temple sections reminiscent of Hydrocity Zone and Labyrinth Zone and has to run away from giant spiked rolling stones towards the end. As both Sonics can be underwater for good portions of the level, air bubbles are also back in this zone. This issue can be remedied for Classic Sonic if the player has the Aqua Shield equipped.
The Kaos from Ocean Palace returns in this level. There are also underwater portions making allusions to Hydrocity Zone and Labyrinth Zone. Surfing was also hinted at as a power-up for either Classic or Modern Sonic in this stage, but this feature is not present in the final released game. A Kao from Sonic Heroes also appears in Act 1, trying to crush Classic Sonic during the Act.
In 3D sections, running on water is a feature. The moving ruins from the original Seaside Hill return in this level, as well as the Egg Pawns, with some new enemies like Spinners. Some Quick Step sections similar to ones featured in Jungle Joyride and Planet Wisp makes an appearance as well. At one point the player can choose to go through a kart section (reminiscent of the Bobsled sections from the original stage) or jump across several turtles similar to Ocean Palace.
Certain parts of Act 1 are much like sections of Hydrocity Zone and Labyrinth Zone. Perhaps this is Sega's way of providing more variety to the levels, as they most likely knew that certain levels would look too similar to each other. This also makes Seaside Hill the obligatory "Water Level" that appears in most Sonic games, though it's like Aquatic Ruin Zone in which more experienced players can get through the stage without touching barely any water at all.
Seaside Hill Act 2 forbids the player from taking unnecessary shortcuts. The water around the stage is marked off by buoys, and whilst Modern Sonic can run on water, if he ventures outside of the safety area, the player will have approximately 2 seconds to make it back between the buoys or the surface or a Giant Chopper will emerge from the sea and eat Sonic, causing him to lose a life.
Though most likely a glitch, the player can reset the time it takes to eat Sonic whole if the player allows Sonic to drop slightly underwater although it is very risky as the player may be fully submerged underwater and lose a life.
Unlike in Sonic Heroes, Tails and Knuckles are not playable.
As a result, the kart controls are modified. Only Sonic rides the kart, and it is possible to boost while using it.
This stage can be debated as Ocean Palace as well as Seaside Hill, as it not only contains portions of the Ocean Palace level, but also shares its music in Act 2.
This level is placed in the Dreamcast era, despite not appearing on said console. This was done to make each era have an equal number of levels.
The Egg Pawn is the only returning enemy in this stage, since the Spinners and Choppers never appeared in this stage.
Strangely, Spinners replace the Flappers as the flying enemy.
In Act 1, if Sonic has the Bubble Shield on, bounce on a certain platform in the water near a big wall and you are able to get to the top. If the player succeeds this and then jump off to the other side to the cannon, the ground in the next section of the level is invisible.
A remix of this level appears in the background of the mobile game, Sonic Dash.