Dawn of the Dragon is the third and final chapter of the Legend of Spyro trilogy. It starts when Spyro and Cynder are freed from their crystalline prison. They are former foes, but the Dark Master binds them through green energy chains. After escaping their prison with Sparx and Hunter, they are shown what the Dark Master has done after he escaped from the Well of Souls during the Night of Eternal Darkness. They travel through Dragon City, the Burned Lands and the Floating Islands to confront Malefor at his lair.

Just like the previous game, Dawn of the Dragon is a third-person action game with a focus on fighting and exploration even though progress is entirely linear. New to the series is the ability to fly at any time. This edition also provides a cooperative mode with Spyro and Cynder and with just a single player it is possible to switch between them at any time. Spyro attacks with fire, electricity, earth and ice, while Cynder controls poison, fear, wind and shadow. Collected gems provide power-ups and both characters can also equip pieces of dragon armour. Gems include blue ones to upgrade moves, red ones restore health, and green ones make available element attacks through dragon magic. The amount of blue ones provided is based on a melee combo system.

Fury gems have been removed. They are replaced with dark crystals that need to be destroyed as they drain magic. Fury is now determined through a meter that fills up during attacks. Next to the regular enemies there are now elite enemies that were a mask with a certain color. A specific attack is needed to get rid off the mask and then regular attacks become effective.