Like the previous cave level, Contraption Cave, Madcap Mine features levers, which Donkey Kong (or Diddy Kong in Diddy Mode) must pull to move across long rail-shaped bars, manipulate the movement of Peg Boards, or to make a Peg Board slowly appear. Madcap Mine is the first level to feature conveyor belts and crates.
The first section involves Donkey Kong or Diddy having to use a lever to move across some rails. There are many Flipflaps patrolling around this area, which either Kong must avoid being hit by. The second section features conveyor belts moving down, with a few Neeks moving on them like a treadmill. The third and final section involves Donkey Kong or Diddy using levers to move Peg Boards around or to make Peg Boards slowly appear into view, both are which are necessary for advancing through the level.
While they are not part of the level itself, a couple of Mine Carts appear in the background scenery.
In the first section, there is a lever above a pair of pegs. If Donkey Kong pulls it down repeatedly, it moves along the rail it is connected to, which has several bananas lining it. Two large peg boards are above the end of the bar with a Flipflap to the left of them and another lever ahead of them. The lever can move the player along a yellow bar to reach a few bananas and a blue peg board that has a few single pegs near it. A lever on a slanted bar is by the pegs, which the player can use to travel upwards. A Flipflap gets in the player's way as they travel. The next peg board immediately after the end of this bar is followed by another lever on a bar. Without hitting into the moving Flipflap crossing back and forth on the two sides of the object, the player can pull themselves to a ledge that leads to the next area with the lever.
In this area, there are a few sets of conveyor belts that pull Donkey Kong downwards. He must quickly climb up to outpace the conveyor belts and avoid a few Neeks. A crate is at the bottom of the area with some spikes underneath. By destroying the crate, it reveals a Banana Bunch. Two more crates are at the top of the belt, and a Neek blocks the player's path between them. Both crates contain normal Banana Bunches. There is a small set of conveyor belts above here, which the player can jump from to reach a ledge that leads to the third section.
Here, there are some more levers that correspond to the Peg Boards. The first lever is at the beginning of the area above two single pegs. When it is pulled a few times, three blue peg boards appear behind some bananas, disappearing after a short time. They can be used to reach some more peg boards, which have a green lever above them. Three green peg boards appear for a limited time above when it is pulled to aid the hero in reaching some solid peg boards. A barrel with a DK Coin in it is on one of these peg boards, which can be broken if the player pulls the previous lever to make a fourth peg board appear above it. There is a third lever ahead of here, and when it is pulled, three red peg boards descend for the player to use. When the lever is not being pulled, they begin to move upwards again, so the player can hold onto them as they rise to reach a ledge with an exit sign on it. Alternatively, the Kong can go onto a ledge nearby with a Bonus Barrel, which leads into a Bonus Level.