Mutants & Masterminds' game mechanics are based on the OGL d20 System, designed by Wizards of the Coast, however it is a highly modified version of that basic system. The largest differences pertain to character creation, injury and damage, and hit points, as well as the addition of Hero Points and, obviously, super powers. There are also numerous other differences such as the elimination of character classes and attacks of opportunity, a modified Skill list, a very different Feat selection, and the fact that any equipment possessed is considered a part of the character and purchased in a manner similar to powers.
The following information details what makes M&M notable among other d20-based RPGs and is provided under what Green Ronin considers "open game content".
M&M characters are not class-based nor do they technically have class levels. Instead, they have a Power Level (or "PL"), and typically a character begins at Power Level 10 instead of Level 1. This allows a character to begin as an already established superhero with incredible abilities. The power level represents the maximum rank of any combat abilities a character can purchase. Each power level typically grants a character an allotment of points to purchase attribute levels, base attack and defense bonuses, saving throws, feats, skill ranks and super powers, though the game encourages Game Masters to modify the number of points given per level up or down to reflect the style of game they wish to run. It is worth noting that all aspects of the character from Abilities, to Feats, Skills, Powers, and Equipment are purchased from this pool of points.
The M&M power level does not exactly reflect the typical abilities of another character of equal level in another d20 game, meaning a level 10 M&M character could be much more powerful than a 10th level character in Dungeons and Dragons or d20 Modern for example; it merely restricts the maximum bonus held by skill ranks, ability scores, and most feats and powers. The maximum skill rank is Power Level+5, two points higher than in standard d20 games. With Game Master approval, characters can "trade in" maximum attack in return for maximum save DC/damage bonus, or maximum defense bonus in return for maximum Toughness save. (For example, a PL10 character could have a maximum attack bonus of +12, but could only have a maximum damage bonus of +8.) Beyond limiting bonuses, Power Level does nothing to restrict a character's power; a power level 10 character can have a maximum Strength of 40, whereas normal d20 characters would be lucky to have a single 20-rated score at 10th level.
M&M has optional rules of eliminating the Power Level entirely, where characters have no limit caps to things such as Skill Ranks or Attack Bonuses. They are essentially limited only to the number of Power Points the Game Master gives them, although this may make characters unbalanced. Some d20 System players who believe classes and levels are too restrictive have looked to the structure of M&M for making their own classless and level-less d20 games.
Damage in M&M is handled differently as well. M&M does not use Hit Points. Instead, a character has a fourth Saving Throw called the Toughness Save ("Damage Save" in the previous edition) which is based on their Constitution score (just like Fortitude). Weapons and powers that do lethal and subdual damage do not roll any dice to determine damage. Instead, damaging attacks are ranked based upon their overall power. For example, a fairly fit but normal human may throw a punch that inflicts +1N (non-lethal) damage, while the irradiated simian mastermind with enhanced strength and razor-sharp claws throws out +12L (lethal) damage. When a character is struck by an attack, they roll a Toughness Save against a target number equal to the rank of the attack plus 15. Success allows the character to shrug off the attack with minimal effect, while failure results in injury according to the degree of failure and the type of damage. Accumulated damage applies a penalty to further saves, increasing the chances of any given attack taking the character down.
This system of damage is meant to model the nature of super-hero comics, in which many characters can ignore most damage outright, while still being susceptible to a lucky punch or super-mega-cosmic blast. For those more comfortable with the traditional hit point system, the Mastermind's Manual rulebook includes notes for conversion to that mechanic.
In M&M, characters are awarded Power Points (similar to experience points) that can do many beneficial things for the character. As described above, Power Points (abbreviated pp.) are used to purchase powers, feats, skills, abilities, and devices. The specific nature of Power Points was changed drastically with the 2nd edition (2e) of Mutants & Masterminds. In the first edition, when a character accrues 15 pp, they advance a Power Level, thus raising the caps on power and skill ranks, as well as on power bonus stacking. There were options to keep the Power Level the same while increasing total number of points (and many sample antagonists in the Game Master setting have more points than their Power Level would suggest), but these have been incorporated into the 2nd edition rules.
Under the second edition, Power Points and Power Levels are independent, the latter being set by the Game Master as a function of the campaign. The 2e concept of Power Level determines only the maximum bonus that any power can give, and does not imply that a character does or does not have the points required to purchase enough levels in any power to reach this limit. Though the two are described as being entirely independent, the Mutants & Masterminds manual recommends that the Power Level be increased by one with each 15 Power Points awarded.
Like many other super-hero role-playing games, M&M uses "Hero Points". Hero Points allow an unlucky player to be able to hold their own in a battle, thus reducing the amount that luck plays into the gameplay. A Hero Point can do several things, like allow the reroll of a failed roll of any sort at a crucial moment, including Toughness saves to avoid damage. On this reroll numbers under 11 have ten added to them, resulting in a range of 11-20, and a very slim chance of failing.
A player may also use a Hero Point to ignore fatigue. This last is particularly useful since, by fatiguing himself, a character can gain any Feat temporarily, or use a Power he possesses to duplicate another power of the same cost. Normally, as stated, this fatigues the character meaning it can only be used once or twice, but with Hero Points to ignore the fatigue, it can be used as long as the Hero Points hold out.
Hero Points are generally awarded to a player by the Game Master when something bad befalls the character, such as the villain escaping without them having a chance of stopping him. This is particularly encouraged if the bad thing in question is something related to one of their disadvantages, and many disadvantages provide no other benefit aside from acting as a source of Hero Points.
Source: Wikipedia, "Mutants & Masterminds", available under the CC-BY-SA License.