Chimera Squad is set five years after the end of XCOM2, in City 31. The Elders are defeated, and the aliens and hybrids, free of their control implants and abandoned by the Elders, are no longer hostile to humanity. Humans, aliens and hybrids are now trying to rebuild and make a new world where all can prosper.
However, the new world is not without new problems. Societal integration of aliens into Earth's society is hampered by the skepticism of former alien detainees who have no place they can call home, as they see little real difference between the Elders' domination and the rule of the Global Council. The global economy of the Old World has long since collapsed, and local economies have yet to fully adjust to post-war life. Psionic powers are known about by the public, sparking fear and controversy about their potential for abuse. Hybrid populations worldwide have been stricken by a mysterious wasting disease called the Fade, which has no known cure. Some of ADVENT's old technology has not yet been accounted for and there are reports of still-functional MECs and automated defenses continuing to follow their old programming. Finally, even XCOM itself is not wholly certain if the Elders were completely defeated and it is feared that they may one day return to finish what they started.
Chimera Squad is part of the Reclamation Agency, a semi-autonomous organization affiliated with XCOM led by Director Jane Kelly and tasked with keeping local communities safe from the dangers that the Elders left behind. They are dispatched to City 31 to help deal with a recent uptake in violent crimes in the city, but upon arrival are quickly faced with the assasination of the mayor as part of a terror campaign intended to destabilize the city. Chimera Squad must race to find and confront the unknown group behind the unrest before the city falls to anarchy.
The game features turn-based tactical combat that the XCOM remakes are known for, as well as a strategic layer reminiscent of the 2012 remake involving gathering income, managing unrest, researching new technologies, and training and outfitting agents.
The tactical game is now based on Encounters, rather than dropping the squad off from the Skyranger and proceeding freeform. Each encounter is essentially a room or other area the Squad enters by breaching, with each mission consisting of up to three encounters. Each agent gets an action when breaching, then turn based tactical combat ensues after the breach to accomplish an objective, which is often killing or subduing all enemies, but could also be other objectives such as to retrieve an item and escape. Different breach points offer different advantages and disadvantages when breaching, with a few requiring specific gear or agents to use.
The standard turn order is replaced with the Timeline system, where Agents and enemies alternate taking actions in a turn instead of taking them collectively as a team. The initial turn order is based on the order in which the agents breach and the breach points they select, but can be modified by certain abilities.
Agents are now fully realised characters with extensive voiced dialogue and specialized ability trees, rather than being randomly generated. Agents who are reduced to 0 HP will always bleed out instead of immediately dying, allowing a chance to stabilize them; a stabilized agent can take no further part in a mission, but can be replaced for its duration by an android. A mission will fail automatically if a squad member dies, so agents will never be lost in the field. However, injured agents may develop Scars that reduce their base stats by a significant amount. These can only be removed by sending the affected agent to the Training Center.