Set in a future where industrialization has covered much of the Earth, the player takes part in an elite defense force piloting a robot to protect the United Republic against terrorist activities by PENTA.

[2][4][5][6] Each mech also has its own special features: the Iron Soldier can fly with a jetpack for a short time period, the Satyr can hide using an invisibility device, and the CE-Tech can create a destructive force field.

Destroying warehouses, fuel tanks, and bunkers yields crates containing extra ammo, energy repair, or items like a spy drone, infravision, and speed up.

[8][13][14] Rosocha explained that Eclipse was close to reaching an agreement with Sony to publish the game as a first-party title, but it was cancelled at the last minute, leading to a deal being signed with Vatical Entertainment and Telegames.

[14] Eclipse also made a Nuon version for VM Labs, a California-based semiconductor company founded by Richard Miller with former Atari and Sony staff.

[13][18] Rosocha acted as the game's director and designer, while the Nuon version was produced by Joe Sousa, who worked on several Jaguar titles such as Cybermorph and Kasumi Ninja.

[14] Eclipse eschewed software tool libraries provided by Sony and instead relied on directly programming its own routines for the PlayStation hardware to ensure high performance and better visual quality, avoiding texture warping and clipping errors.

[25] GamePro's Vicious Sid highlighted the game's detailed environments and addictive gameplay, but found the techno music forgettable and the control scheme complicated.

[10] IGN's David Smith found Iron Soldier 3 visually faithful to previous entries on the Atari Jaguar, and commended its variety of missions and mechs, but felt it did not compare to Gungriffon on the Sega Saturn and the multiplayer mode was flawed due to its slow pacing.

[26] MAN!AC's David Mohr commented favorably on the game's graphics, but criticized its unspectacular mission parameters, irrelevant story, and sluggish controls.

[38] GameSpot's Miguel Lopez made positive comments about the game's CG sequences and controls, but faulted its rough graphics, dull soundscapes, and lackluster weapons.

[2] The Electric Playground's Mandip Sandhu gave positive remarks to the game's video sequences and audio, but criticized the walker mechs for being useless, multiplayer modes and sluggish playability, recommending Armored Core or MechWarrior instead.

[39] Official UK PlayStation Magazine's Paul Rose panned the drab visuals and flawed controls, writing that "Iron Soldier 3 can join its predecessors on the scrap heap of obscurity".