The rebellion orchestrated by General Morden to bring about a new global regime is now history, and order and peace has begun to return to the world. Morden, brought back into power, was attempting another coup d'etat, but government forces got wind of the plot beforehand and pre-empted the impending assault.
The gameplay mechanics are the same as previous Metal Slug games. New for Metal Slug 3, however, is the branching path system; in most missions, there are forking paths for the player to choose from, each with their own obstacles, and of varying length and difficulty. All paths eventually lead to the same boss battle, but the player may have different equipment, and may have rescued more or fewer hostages depending on their choices.
Although no new weapons were added, Metal Slug 3 contains new vehicles for player use: - The Slug Mariner gives some added firepower for those underwater. It fires high-mass rounds which sink to the bottom, as well as torpedoes. - The Elephant Slug is a hulking ice age mammoth strapped with a Vulcan cannon. By picking up a Battery or a Chili Pepper, the mammoths can fire a bolt of lightning or a fireball from its proboscis, respectively. But when zombified, the player is unable to ride it again. - The Ostrich Slug is reminiscent of the Camel Slug. It is even faster, can jump farther, and can turn around. (However, doing so makes the rider momentarily vulnerable to enemy fire) - The LV Rebel Armor is a Rebel-produced vehicle, but can be captured and used by the player. It comes equipped with a heavy machine gun, which is interchangeable with other handheld weapons. (Unlike the Slugs, the Rebel Armor's main armament has limited ammo) It also has a Super Grenades, a melee claw attack, and jump jets. The other player can stand on top of the Rebel Armor, and can receive a boost to extreme heights. - The Slug Copter appears along with the Slug Flyer in the airborne portion of the Final Mission. Its Vulcan cannon can fire in all directions, unlike the Flyer. It is armed with gravity bombs.