The third main installment of the Virtua Fighter series (and the first game to use their powerful Sega Model 3 hardware), Virtua Fighter 3 features an enhanced graphical engine (including character eye movement, cloth and facial animations, and numerous anti-aliasing, shading, lighting, and particle effects) and higher environmental and character detail.
It also includes major gameplay changes (some of it removed in the game's sequel), such as a new fourth button (the Evade button, used for side-stepping and easy dashing), modified jumping mechanics, and stages with walls and/or uneven/sloped ground (using inverse kinematics to determine the character's ground position and to provide a more realistic animation).
The game later received an updated version in September 1997, titled Virtua Fighter 3tb. As the "tb" in the name stands for "team battle", this version adds a new optional mode where players fight with teams of fighters (similar to the King of Fighters series). This version was later ported by Genki to the Dreamcast as a launch title in Japan (and later on October 18, 1999 worldwide). A Saturn port was in development in-house, but was later cancelled.
- Aoi Umenokoji (High school student from Japan, fights with Aiki-jujutsu)
- Taka-Arashi (Sumo wrestler from Japan, fights with sumo)
- Akira Yuki (Martial arts teacher from Japan, fights with "Eight Extremities Fist" kung fu)
- Kage-Maru (Ninja from Japan, fights with jujutsu)
- Jacky Bryant (Indy car driver from the United States, fights with Jeet Kune Do)
- Sarah Bryant (College student from the United States, fights with Jeet Kune Do)
- Pai Chan (Movie star from Hong Kong, fights with "Lost Track Fist" kung fu)
- Lau Chan (Cook from China, fights with "Tiger-Swallow Fist" kung fu)
- Wolf Hawkfield (Professional wrestler from Canada, fights with professional wrestling)
- Jeffry McWild (Fisherman from Australia, fights with pancratium)
- Shun-Di (Herbal doctor from China, fights with "Drunken Fist" kung fu)
- Lion Rafale (High school student from France, fights with "Praying Mantis Fist" kung fu)
- Dural (Mysterious gynoid and the game's bonus boss using techniques from all other fighters, only playable with cheat codes in the DC version)