Development of Sonic the Hedgehog began in 1990, when Sega ordered its AM8 development team to develop a game featuring a mascot for the company. After a hedgehog was decided on as the main character, the development group was renamed Sonic Team.

In an attempt to steal the six Chaos Emeralds and harness their power, the game's antagonist Dr. Ivo Robotnik ("Dr. Eggman" in the original Japanese release) has trapped the animal inhabitants of South Island in cybernetic shells and metal capsule prisons. The player controls the titular Sonic the Hedgehog, who aims to stop Robotnik's plans by freeing his animal friends and collecting all Chaos Emeralds himself.

Sonic the Hedgehog plays as a 2D side-scrolling platformer. The gameplay centers around Sonic's ability to run at high speed through levels that include springs, slopes, high falls, and loop-the-loops. The levels are populated with hazards in the form of robots (named "badniks" in the Western game manuals)[6] that Dr. Robotnik has trapped animals inside; destroying one frees the creature, but is not necessary to complete the game. The player must also avoid touching rows of sharp spikes, falling into bottomless pits, and being crushed by moving walls or platforms, as well as drowning, which can be circumvented by breathing air bubbles periodically released from vents. Sonic's main means of attack is the Spin Attack, in which he curls into a ball and rotates rapidly, damaging enemies and certain obstacles upon collision. This can be performed by jumping in the air or by pressing down on the D-Pad while moving on the ground.

Scattered around each level map are gold rings. Collecting 100 rings rewards the player with an extra life. Rings act as a layer of protection against hazards: if Sonic holds at least one ring when he collides with an enemy or dangerous obstacle, he will survive. However, all of the rings in his possession will be scattered; they will flicker and disappear in a few seconds if not picked up again. If he is hit without holding any rings, then he loses a life. Shields and temporary invincibility can also be collected to provide additional layers of protection, but certain hazards, such as drowning, being crushed, falling down a bottomless pit or running out of time, will cause Sonic to lose a life regardless of rings or other protection.

Sonic the Hedgehog received positive reviews from critics, who praised the game's visuals and its sense of speed. It was commercially successful, increasing the popularity of the Mega Drive/Genesis and establishing Sonic the Hedgehog as the company's mascot. Its success led to the development of subsequent games in the Sonic the Hedgehog series, as well as the creation of a media franchise of spin-off products featuring the character.