It depends on what format you agreed to play with against your opponent. There is a single battle format (which is played most of the time), and then there is a double battle format, where each player uses 2 active monsters. Only one monster can attack per turn. If a monster is KOed, it must be replaced. Essentially, you must have 2 active monsters out if you can (unless you have only 1 monster left).
There is also a team play format that was introduced during the times that Wizards was still around. I wish that there were team play tournaments; that would be pretty cool. I actually had a thread with a poll regarding 2 vs. 2 and team play, but it is probably dead by now (you can check if you want... should be in the TCG discussion page).
EDIT: Yeah, my thread is older than a month. I think you can still vote in the poll; just can't post anymore.