Like previous installments in the series, the game is an arcade-style racer and focuses on wild, high-speed racing, rather than realistic physics and driving.

The name is derived from a partnership between Rockstar and DUB Magazine, which features heavily in the game in the form of DUB-sponsored races and DUB-customized vehicles as prizes.

Players race through open world recreations of San Diego, Atlanta, and Detroit listening to 98 (124 in the Remix version) licensed music tracks that include hip hop, rock, and other genres.

The game features a number of graphical views after the player crashes into certain objects, or travels across particular stretches of road.

In March 2006, a updated version of the game was released titled Midnight Club 3: Dub Edition Remix; which featured new vehicles, races and music, as well an additional mode called "Tokyo Challenge" which features a altered Tokyo map from Midnight Club II.

These options include enhancing the performance, adding vinyls and new paint jobs, and physically modifying the car by changing parts such as wheels, bumpers, spoilers, neon, hoods, and engine components.

Tuners, Sport Bikes, Exotics, the Lexus SC430 and Mercedes Benz SL 500 (R230) (along with its higher-performance AMG variant, the SL 55) get "Zone" (a form of bullet time which allows for more precise handling at high speeds), Trucks/SUVs and Luxury Cars get "Agro" (which allows the vehicle to plow through traffic and other obstacles without taking damage or slowing down), and Muscle Cars and Choppers get "Roar" (the only offensive ability, it launches a sonic wave that blows away any vehicles in its path).

The player begins with a choice of six cars: a 1964 Chevrolet Impala, a 1978 Chevrolet Monte Carlo, a 2004 Dodge Neon SRT-4, a 2004 Mitsubishi Eclipse GT-S, a Volkswagen Golf R32 Mk4, or a 2004 Volkswagen Jetta (Midnight Club 3: Dub Edition Remix added the option of a Scion tC).

Beating each of these street racers will unlock an invitation to challenge a racing club the rival racer is part of; Vanessa unlocks the Unbeatable Street Racers (Tuners; which rewards the player with a Nissan Skyline GT-R (R34)), Bishop unlocks the Luxury Rollers (Luxury Sedans; which rewards the player with a Mercedes-Benz CL 55 AMG (C215)) and Carlos unlocks the American Royalty Car Club (Muscle Cars; which rewards the player with a Chevrolet Corvette (C3)) Beating two of these street racers will allow the player to challenge Phil for ownership of his Hotmatch Cuevito, and an invitation to challenge the Chopper of America bike club.

Once the player defeats Phil, along with winning one of the three initial tournaments, Vanessa will challenge them again, this time, driving an upgraded Mitsubishi Eclipse GT-S. After defeating all racers (except for one of Bishop or Carlos) and winning one of the tournaments in San Diego, the player is introduced to Vince (Kiff VandenHeuvel), a mechanic from Detroit.

The owner, Apone (Dexter Tillis), introduces himself, but is distracted by his most prized possession: a 1964 gold painted Chevrolet Impala that he customized and is constantly tinkering with.

After defeating all racers (except for either Dre and Cheng or Vito and Naomi) in Atlanta, Apone mentions that there are more races going on in Detroit and that he thinks it is a good idea for the player to check it out.

Street racers in Atlanta are: Roy (1969 Dodge Charger R/T, later a 1999 Dodge Charger R/T Concept), Dre (2005 Cadillac Escalade (second generation)), Cheng (Mitsubishi Lancer Evolution VIII), Vito (Ducati Monster S4R), Lamont (Chevrolet Silverado SS; later returns in a Mercedes-Benz CLK GTR Strassenversion during the US Championship) and Naomi (Hotmatch Skully).

Defeating them earns the player a special, rare 2004 Chrysler ME Four-Twelve (with "Zone" for Exotics being unlocked after the third race).

Street racers in Detroit are: Roy (returning with a Dodge Viper GTS-R Concept; and eventually with a McLaren F1 LM), Spider (Hotmatch D'Elegance), Leo (1981 Chevrolet Camaro Z28), Ceasar (Mercedes-Benz SLR McLaren, later a Lamborghini Gallardo and eventually a Chrysler ME Four-Twelve), Kioshi (Aprilla RSV 1000 R Mille Factory, later a Kawasaki Ninja ZX-12R), and Angel (Saleen S7; later a Cadillac Cien).

Musical artists found in the game include numerous Army of the Pharaohs members, The Game, Paul Wall, T.I., 50 Cent, Big Tymers, Mannie Fresh, Fabolous, Bump J, Calyx, Deep Blue, Ash, Aztec Mystic, Jimmy Eat World, Kasabian, Marilyn Manson, The Explosion, Nine Inch Nails, Sean Paul, Pitbull, Lil Wayne, and other artists.