Starfleet Command III is a 3D tactical starship combat game, set in the universe of Star Trek: The Next Generation. The single-player campaign arcs are playable as Federation, Klingon, or Romulan factions. The game has customizable starship construction options (giving the player the opportunity to retrofit phasers, torpedoes, engines, and other components as he or she gains prestige points). The Dynaverse 3 feature offers persistent online gaming as up to 128 players compete to conquer the galaxy.

The single-player storyline is broken into Klingon, Romulan, and Federation segments. The plotline involves a threat to galactic peace which emerges after the Klingon-Federation alliance constructs an advanced new starbase, designated 'Unity One', near the Romulan border. Each campaign invites the player to behave in a manner suited to the character of the chosen faction, as one proceeds through a consistent plot.

In addition to the single-player campaigns, there is a single-player 'Conquest' campaign which allows the player (as Klingon, Romulan, Federation, or Borg) to attempt to dominate the galaxy without passing through campaign missions. Head-to-head multiplayer action without the grand strategic elements of Dynaverse 3 is available in multiplayer battle scenarios which can be played over Internet or LAN.