Grand Theft Auto III's game structure has not changed much. The player's character is placed on a large and open map and is free to complete missions in the main story, secondary missions (vigilante, paramedic and cab missions, etc.) or free to explore. Completing missions rewards players with money, small rewards, or unlocks a new street and area in Liberty City for players to explore. There are six levels of law enforcement, including police, SWAT, FBI agents and military, who deal with in-game violations; avoid them in the same way as in Grand Theft Auto and Grand Theft Auto II. Most of the vehicles in Grand Theft Auto III are designed to look very similar to the real thing. Crimes such as car theft, murder and theft can also be committed in this game.

The flat screen display has been significantly revised. It has been changed to a player-centric compass, guided by a separate mini-map that also shows a map of key locations in the city (such as hideouts and contact points) or targets. Armor and life values are displayed by numbers, and a 24-hour clock has been added. Gang respect value is no longer displayed independently; instead, the player's progress affects the respect value of gang members. When a player completes a mission for a different gang, gang henchmen will actively attack the player if they pass through hostile gang territory.

Once the player's character dies or is arrested, he will be immediately sent to the local hospital or police station respectively, and will lose all his weapons and a certain amount of money for "medical expenses" or "bribery", but there is no limit to the number of deaths or arrests.