After World War II, rapid technology development carried humans towards a supposedly bright future, fulfilling their eternal dream. But eventually war raged again and in the year 2077, the dream suddenly came to a halt and mushroom clouds dominated the sky. A few communities survived in their underground bunkers called "Vaults"; others mutated heavily. Overall, what was left of the world was nothing more than a nuclear wasteland filled with ruins of a once great civilization. Two hundred years later, the human kind slowly but surely leaves the vaults and reclaims the lands of Earth.

The protagonist is one of them. As a member of Vault 101 in the wasteland surrounding the city formerly known as Washington D.C. and now called "Capital Wasteland", raised under the tight rule of the Overseer and the watchful eye of his father, he doesn't know anything about what is outside. But on his nineteenth birthday, his father unexpectedly leaves the vault. The hero's goal is to find him, learning part of the truth about what the Overseer concealed all these years on the way.

Fallout 3 is a role-playing game with elements of a 3D shooter. It retains many elements of the previous games in the series, while somewhat shifting the emphasis from social interaction and ethical role-playing to exploration of an open, continuous 3D world and combat. The player is free to explore the game's world from the beginning, visiting many optional locations, talking to characters and completing side quests. The main quest line, however, is largely linear, posing moral choices to the player only during its final phase.

Character creation and customization are similar to those of the previous games. The player shapes the main character by allocating points into the S.P.E.C.I.A.L. (Strength, Perception, Endurance, Charisma, Intelligence, Agility, and Luck) attributes. The skill system has been mostly carried over from the preceding installments, including weapon specializations (small and big guns, energy weapons, etc.), and active skills such as Science, Repair, Lockpick, and others. Passive skills, particularly Speech, play a lesser role than in earlier Fallout games. A few skills have been removed completely. Skill points and perks are acquired when the protagonist levels up.

Combat system has undergone a major overhaul. Tactical turn-based battles from the previous games have been replaced with two different combat modes; the player is able to switch between them at any time. The simpler system of these two is action-oriented, nearly indistinguishable from traditional 3D shooter combat. The player character equips a weapon (ranging from a baseball bat to the destructive mini-nuke-launcher) and attacks enemies with it; damage calculation is based on the participants' statistics more than on the player's dexterity, though the latter plays a role as well. In addition, the player can opt to switch to Vault-Tec Assisted Targeting System (V.A.T.S.) combat mode, a real-time system that allows the player to pause the game at any time and target specific regions of one or more enemies until the available action points are used. After all the actions have been assigned, the game plays them out in a slow motion.

The Karma system from the previous installments is back, keeping track of the main character's actions and decisions made by the player throughout the course of the game. Ethically unacceptable actions reduce the player character's Karma points.