Unlike the first and second game, weapons in Street of Rage 3 can only be used a fixed number of times. However, additional weapon special attacks could be performed. The game also features return of SOR1 team attacks in which two characters work together to perform a powerful attack as in the first game. Blitz moves, performed while players run, were altered so that they can be upgraded in strength over the course of the game. The player would have to earn a set amount of points on one life to upgrade it. Losing a life would put the blitz move down a level, but the upgraded moves could still be performed by pressing X on a 6 button controller, followed by a button sequence.

Traps in stages were brought back from the original game, for example, enemies can once again be thrown into pits or off the side of an elevator.

Enemy AI was expanded so more enemies can pick up weapons, block attacks, employ co-operative attacks (usually, a Big Ben-like enemy will throw one of the Garcia enemies at the character to smack them down), and even steal exposed food items to regain health.

After being defeated twice, Syndicate crime boss Mr. X has started a research company called RoboCy Corporation to act as a cover for his illegal activities. The world's best roboticist, Dr. Dahm, has been brought in to help him create an army of realistic robots to replace important officials from the city. With the replacements in place, Mr. X plans to run the city using a remote control device. His criminal organization, The Syndicate, has strategically placed bombs around the city to distract the police while the city officials are dealt with.

Dr. Zan discovers what the research is really for and knows the Syndicate must be stopped. He contacts Blaze Fielding with the details of The Syndicate's plan. Blaze quickly contacts her old comrades Axel Stone and Adam Hunter for a task force to bring down The Syndicate once and for all. Axel quickly joins the task force, but Adam can't make it (due to his own assignments from within the police) and sends his young brother, Eddie "Skate" Hunter instead. The game has four endings depending on the difficulty level and if the player defeats certain levels in an allotted amount of time.