On the 19th of October 1989, Hokuto no Ken 3 was released, only in Japan, and only on the Famicom. Unlike the previous two games, which were beat 'em ups, Hokuto no Ken 3 is an RPG and follows the story of the original manga from Kenshiro meeting Bat and Lin for the first time up to his battle with Kaioh in the Land of Asura. Certain elements of the story were changed, with a few characters who died in the manga surviving in the game, such as Ein and Ryuken.

Kenshiro starts out his quest at the entrance of Lin's village, and has journey involves the usual RPG stuff such as wandering around talking to villagers, getting people to team up with him and having random encounters with enemies. Kenshiro's allies can help him in battles, such as offering extra strength, or being able to heal other characters. Throughout the game Kenshiro's party can get different members in it, such as Bat, Lin, Rei and Toki.