The first part of the game tasks the players to construct and manage a mining town on an alien planet.

The town's progress is measured via milestones, which is determined by the town's overall population, with each inhabitant assigned to one of four different categories, which are gradually unlocked as the milestones are cleared: Workers for unskilled labor; Enginners for working on heavy machinery; Aristobots who establish various kinds of industry; and Scientists who focus on researching and developing new technologies.

[4] The underground workers are divided into four groups: Miners, who open tunnels along the mine; Prospectors, who carry resources back to the surface; Mechanics, who can build and repair all sorts of machinery, including other bots; and Guards, who fight monsters and other dangers lurking in the mine.

The "Mechanized" DLC introduces a fifth type of worker, the Mech, whose exclusive abilities can be applied to both exploration and combat.

Set during the events of SteamWorld Dig 2, with the planet's destruction imminent, Jack Clutchsprocket arrives at an abandoned mine along his daughter Astrid and a group of refugees.

They are guided by the mysterious bot "Core", who told them that inside the mine are the materials they need to assemble a rocket they can use to escape the planet.