This is the first level in the game that Hammer Bros. appear. The player starts off next to the castle. When the player walks ahead, they encounter two Hammer Bros., taking residence on two long block platforms. On the bottom platform, the fifth block to the right has a Star. The next pipe takes the player to a backwards Warp Zone; to World 1-1. After jumping over a small hole, the player passes two Koopa Troopas. Above the Koopa Troopas, there is a ? Block with a Mushroom or Fire Flower. Then, the player must jump over a Piranha Plant and jump up and over another platform. If the player chose to jump under the platform, they can climb a Vine to get to a Coin Heaven. If the player chooses not to get to the coin heaven, the player has to avoid three Koopa Paratroopas to get to three ? Blocks, the farthest one. The green Trampoline can take the player above the Flagpole, and will lead to the same backwards Warp Zone; to World 1-1. On a side note, there is a small gap in that Warp Zone, which can be used to escape it. However, the player does lose a life in the process.
World 3-2 is an underwater level. The player starts floating down to the green blocks below, near a Blooper. The player must avoid the oncoming Bloopers and Cheep-Cheeps while navigating tight holes obscured by corral and more green Blocks. There are also 37 coins to collect, and three Koopa Troopas scattered throughout the level. These underwater Koopas cannot be defeated, unless the player has obtained a Fire Flower or Star. At the end of the level, a Warp Pipe leads the player to the overworld, where the flag can be found.
This level is apparently snowy, like the one in the original, and with Mario jumping above treetops. At the beginning of the level, a chance for a 1-Up is available by knocking a green Koopa Paratroopa to the left and following it because of the shell hitting several enemies. The level also includes separate single and double blocks and pipes with Piranha Plants in them, so it would not be wise to dash through the level recklessly. In the SNES version, the background is not snowy at all.
This level is a maze, and taking the wrong path causes the level to repeat. If the player stays on the bottom until the area past the set of two pipes, some hidden blocks are revealed, and they can take the top path through the rest of the level.