In Lady Alice – a game of intrigue, flair, bluffing, and mischief – the players are the Baker Street Kids, children under the tutelage of Sherlock Holmes who must deduce the culprit behind the kidnapping of Henry Morton Stanley as well as the time and place the kidnapping occurred and which object was stolen at the same time.

Holmes gives each player the solution to one of these categories at the start of the game, and players must keep such information secret. On a turn, the active player voices his suspicions in the form of a sentence – "I suspect ....... of having been seen at ....... at around ....... hundred in possession of ......." – filling in the blanks with one of the eight possibilities in each category. All players then secretly note whether or not they hold the evidence card for one of the four things named by placing a verdict card inside a folder. The active player shuffles these folders to disguise who answered in which ways, then reveals them. If all four items guessed were false, then you cover those four guesses on the game board with Holmes' business cards; otherwise players mentally note how many of the items were correct and try to decipher which ones those might be.

Players then participate in a deduction round in which each player can:

Place a deduction token on a clue.
Say "I pass".
Attempt an accusation.

If all players pass successively, the round ends and the next player in clockwise order then voices a suspicion. Otherwise a player can pass, then place a deduction token or attempt an accusation later in the same round.

Each player has nine deduction tokens in his color, three each of 0, 1 and 2. To place a token, you place it face-down on the clue of your choice to the right of any tokens already present; if any of those tokens are face-down, you reveal those tokens. At most four tokens can be placed on a clue.

To attempt an accusation, you say, "I accuse (suspect) of having been been seen at (place) at around (time) in possession of (object)", then all players submit their verdict cards the same way they normally do. If all of them are positive, you've solved the case – but not necessarily won the game. All tokens on incorrect clues and all tokens belonging to players who made a false accusation are removed, then players tally the numbers on their tokens, scoring bonus points if they have a token on each piece of evidence, or if they made a correct suspicion or accusation. The player with the most points wins.

With three or five players, you decrease (increase) the number of evidence cards handed out at the start of the game and the number of tokens that can be placed on a clue.