After leaving San Andreas and going on a crime spree throughout the country, Claude Speed and Catalina head to Liberty City for a life of crime. During a bank heist, Claude is betrayed by Catalina and her Colombian friend Miguel, and he is shot by her just as they are leaving the scene of the crime. Claude fully recovers....in a prison cell. However, while being transported to a prison, Colombians ambush the prison van for an inmate riding with Claude. Claude and his friend, 8-Ball, escape in the process. Now it is time for revenge. Claude slowly rises through the ranks of the local gangs, gaining trust from local mob bosses and turning on others. Claude gains influence, trust, and most importantly, money along the way. It is time for Claude to rise from the dead and get revenge for what Catalina has done.

Grand Theft Auto III is similar in its concept to its predecessors: the player is cast in the role of a vicious (albeit novice) criminal, who performs tasks for crime lords and gradually raises his rank in the criminal world. Driving is the main gameplay element in the game, though the player can also fully explore the city on foot. For the first time in the series, the entire game is rendered in 3D. Different camera angles are available for driving, and free camera rotation is available when on foot.

As opposed to the previous games, Liberty City is the only city the player can explore in the game. The game puts more emphasis on the story, displaying cutscenes before each mission. In order to complete the game, it is necessary to perform all the main story missions; however, the player often has the choice between several missions at a given moment. The missions include chases, races, short third-person shooter sequences, as well as various mini-game-like activities. Outside of the missions, the player is free to explore the city and undertake sub-missions, for example working as a taxi driver, delivering sick people to the hospital in an ambulance car, etc.