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It was the first game released on Namco System 12 hardware (an improvement to the original two Tekken games, which used System 11). It was also the last installment of the series for the PlayStation. A non-canon sequel was released in 1999 and 2000 in arcades and PlayStation 2 respectively, titled Tekken Tag Tournament, followed by the canon sequel, Tekken 4, in arcades and PlayStation 2 in 2001 and 2002, respectively.

Tekken 3 maintains the same core fighting system and concept as its predecessors, but brings many improvements, such as significantly more detailed graphics and animations, fifteen new characters added to the games roster, more modern music and faster and more fluid gameplay.

Perhaps the most noticeable change from Tekken 2 fight system is movement reform - whereas the element of depth had been largely insignificant in previous Tekken games (aside from some characters having unique sidesteps and dodging maneuvers), Tekken 3 added emphasis on the third axis, allowing all characters to sidestep in or out of the background by lightly pressing the arcade stick (or tapping the controller button in the console version) towards the corresponding direction. Another big change in movement was that jumping was toned down, no longer allowing fighters to jump to extreme heights (as was present in previous games), but keeping leaps to reasonable, realistic heights. It made air combat more controllable, and put more use to sidestep dodges, as jumping no longer became a universal dodge move that was flying above all of the ground moves. Other than that, the improved engine allowed for quick recoveries from knock-downs, more escapes from tackles and stuns, better juggling (as many old moves had changed parameters, allowing them to connect in combo-situations, where they wouldnt connect in previous games) and extra newly created combo throws.

Tekken 3 was the first Tekken to feature a beat em up minigame called "Tekken Force", which pitted the player in various stages against enemies in a side-scrolling fashion. If the player succeeds in beating the minigame four times, Dr. Bosconovitch would be a playable character (granted that you defeat him first). This was continued in Tekken 4 and succeeded by the Devil Within minigame in Tekken 5 - but Boskonovitch was dropped as a playable character after Tekken 3. There is also a minigame "Tekken Ball", similar to beach volleyball, where one has to hit the ball with a powerful attack to hurt the opponent or try to hit the ball in such a way that it hits the ground in the opponents area, thus causing damage.