Compared to the Japanese version, the Western release of this game features altered graphics and sound effects, and increased difficulty, and does not feature Ash as a playable character.

Enemy AI was also expanded so more enemies can pick up weapons, block attacks, employ co-operative attacks, and even steal exposed food items to regain health. Stages in the game features traps, originally featured in the first Streets of Rage, such as bottomless pits, and some stages have alternate routes depending on certain actions, such as whether players can clear a room of enemies before a non-playable character is killed by poison gas. However, all weapons now have a limited number uses before they break, and unlockable characters are unable to hold weapons at all. Certain weapons now have special attacks that can be performed in the same way as Blitz attacks. Blitz attacks can be upgraded through successive play, and a rechargeable meter allows players to perform a Special attack without losing any health when full. Whereas only Skate was able to run in the previous game, now each character is able to run, as well as perform a vertical dodge roll. Several tweaks have been made to the gameplay following Streets of Rage 2. By fulfilling certain conditions, two bonus characters, Shiva and Roo (known as Victy in Japan), can be unlocked for play, with a third unlockable character, Ash, being exclusive to the Japanese release. Zan, a robot who automatically converts every weapon picked up into a ball of energy. Players can choose from returning characters Axel, Blaze, and Skate, along with a new character named Dr. Much like the previous two games, Streets of Rage 3 is a side-scrolling beat 'em up in which up to two players fight against waves of enemies. Gameplay screenshot, with the player engaged in combat Weapons can be integrated with unique moves with certain characters, hidden characters were added, and a few cutscenes were included to give the story greater depth. The game features several changes over Streets of Rage and Streets of Rage 2, such as a more complex plot, inclusion of character dialog, longer levels, more in-depth scenarios and faster gameplay. The game also appeared in Sega Genesis Classics for Xbox One and PlayStation 4. The game also appeared in Sonic's Ultimate Genesis Collection for Xbox 360 and PlayStation 3. It was later released for the Japanese version of Sonic Gems Collection for the Nintendo GameCube and PlayStation 2, and for the Wii Virtual Console in September 2007. It is the third installment of the Streets of Rage series and the last game in the original trilogy. Streets of Rage 3 is a side-scrolling beat 'em up developed and published by Sega in 1994 for the Sega Genesis.

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