Yokosuka, Japan, 2112 AD. The young student Kazuki Takemura works as a test pilot with Kirishima Industries, a production company of military battle wanzers (walking panzers), mechanized walking robots with movement similar to that of a human being. Kazuki has just finished testing the combat capabilities of the new Zeinslev prototype in the lab. Finishing his day's tasks he is asked by his best friend Ryogo to help with a company delivery to the Japanese Defense Force (JDF) military based. This simple choice determines where Kazuki is when strange things begin happening in Japan. A large explosion, a wanzer theft, his sister Alysia being hunted, rumors of a powerful weapon, and accusations of involvement by agents of both the OCU and the USN all make the situation more complicated. Kazuki is swept up in a plot of conflicting loyalties and attacked by various factions. He will need to recruit additional characters and wanzers in order to be victorious in battle and investigate leads to uncover what is going on.

There are two plots of Front Mission 3, and both revolve around Japanese wanzer test pilots Kazuki Takemura and Ryogo Kusama. Through a decision made early in the game, the player can play either the DHZ scenario or the USN scenario. The DHZ scenario stars Japanese scientist Aliciana "Alisa" Takemura, while the USN scenario revolves around scientist Emir "Emma" Klamsky.

Although both scenarios have different characters and story scenarios, they both share a number of events and locations in the game. Due to its storytelling approach, it is not known which of the two scenarios is canonically related to Front Mission 5: Scars of the War. On October 31, Kazuki begins testing a new prototype wanzer at a Kirishima Heavy Industries test site near Okinawa. Upon completing the test, he is informed that some construction wanzers need to be taken to the JDF base in Yokosuka. Ryogo asks Kazuki if he can join him in delivering the wanzers. If the player chooses to go with him, they will play the USN scenario. If the player does not go with him, they will play the DHZ scenario.

In either case, Kazuki and Ryogo are eventually tasked to deliver the Kirishima prototypes to the Yokosuka base. As they ready the wanzers for delivery, an explosion leads Kazuki to attempt going inside the base itself. The two test pilots are eventually forced to leave the base. Realizing that his sister Alisa was recently transferred to the base, Kazuki and Ryogo eventually find themselves back inside the complex.