Distinctive Software, a Canadian developer known for its racing game expertise in the early 1990s, built the title in partnership with Konami. Bill Elliott was one of the most recognizable names in NASCAR at the time, having won the Winston Cup championship in 1988 and set multiple track speed records. His name and likeness gave the game immediate marketing credibility and helped establish the template of celebrity-endorsed NASCAR titles that would follow throughout the decade.
A closely related title, Bill Elliott's NASCAR Fast Tracks, was released for the Game Boy in 1991 also under the Konami banner.
The game simulates the NASCAR Winston Cup circuit from an in-car perspective, the only camera angle available during racing. Before each race, players choose one of three vehicles: a Pontiac Grand Prix, a Ford Thunderbird, or a Chevrolet Lumina — the three dominant makes competing in NASCAR at the time.
Eight real NASCAR tracks are represented in the game, including Watkins Glen and Talladega Superspeedway. Players can run individual races at any track or compete for a season championship. Race distances range from 10 miles up to a more realistic 500 miles for superspeedway events, offering a spectrum from quick arcade-style runs to lengthier endurance stints.
The MS-DOS version's championship covers all eight tracks in sequence. The NES and Game Boy versions structure the championship differently, visiting each of four tracks twice for a total of eight races. Points are awarded in line with the real-world Winston Cup system of the period.
The DOS and Amiga versions both include an instant replay mode. The DOS version additionally allows players to adjust car setup parameters and toggle damage on or off. A severe collision with another car, however, always results in losing control and retirement from the race regardless of damage settings.
In 1991, Konami ran a contest tied to the game in which players could submit their top championship scores for a chance to win a trip to the 1992 Daytona 500 to meet Bill Elliott in person, along with a 1992 Ford Thunderbird as the prize. To enter, players were required to submit 35mm photographs of their final championship scores, taken under specific conditions: full race distances, manual transmission, and regular damage settings.
Bill Elliott's NASCAR Challenge is a historically significant title in sim-racing history as the originating point for licensed NASCAR video games. The combination of an official series license, real tracks, authentic car makes, and a named professional driver set conventions that NASCAR game franchises — most notably the Papyrus NASCAR Racing series and later EA Sports titles — would build upon throughout the 1990s and 2000s. Its emergence in 1991 helped establish NASCAR as a viable license in the video game market at a time when the sport itself was growing rapidly in mainstream American popularity.