The House of the Dead III departs from the original games in many ways, including weaponry; player characters are equipped with shotguns, rather than the semiautomatic pistols used in the first two games. The shotgun used in the Xbox version of III no longer requires the traditional "point off-screen" reload, but rather reloads automatically. Reloading still takes time, but happens without prompt as soon as the gun needs it. The arcade version differs here, because there is the presence of light guns, allowing for similar speedy reloading. A reload is achieved by pumping the shotgun controller. While playing the game on Xbox, the light gun controller released by Madcatz may be used; however, the traditional "shoot off-screen" reload was reintroduced in the Wii version.
A branching storyline existed in the previous games, but was handled differently. In The House of the Dead III, the player is given options for navigating through the game prior to the start of most stages, ultimately going through the same areas with different results dependent on the order chosen.
Another important difference is the absence of civilians. Unlike the first two The House of the Dead games, in which players could rescue various people in peril, The House of the Dead III contains no extra personnel beyond those central to the plot. Instead, "Rescue Events" occur during each stage in which players will need to rescue their partners from attacking zombies. An extra life is rewarded for each successful rescue. If all rescue events are successful, players find crates in the room before the final boss that, when shot, drop a lot of bonuses and lives.
A new concept of the series comes in the form of a "Cancel" bar. In previous installments, the bosses' weak point would only need to be shot once to stun the attack. In this game, the bosses' weak point must be shot repeatedly to drain the "Cancel" bar and stop the enemy's attack.
Another major change to the gameplay comes in the form of a new rank and grade system. Players are now graded on how fast they dispose of the zombies, ranging from Excellent, Good, Faster, and Twin Shot, the last taking place if two zombies are killed with the same shotgun shell. A letter grade is also given at the end of each stage, ranging from S, A, B, C, D and E. Completing the stage with an A rank will award the player with an extra life, while an S rank will reward the player with two. A final grade is given at the end of the game, and depending on how many S ranks were received for each stage, the player may be given a "SS" rank as the final grade.
Extra lives and bonus points are also handled differently. In the previous arcade installments, nothing would happen if a player had all five lives and gained another. Now the player can have up to nine lives at a time, and any additional lives are turned into bonus points. In the previous games, bonus points could also be gained by shooting hidden objects such as a golden frog, or coin. The House of the Dead III expands upon this, introducing a silver coin that can be shot repeatedly, a wind-up robot that must be shot several times, and a golden miniature version of the recurring boss The Magician. Decaying zombies and weak points on stunned bosses can also be shot repeatedly for gaining extra points.
On the Xbox, PC, PlayStation 3 and Wii versions, there is a "Time Attack" mode where the player's lives come in the form of a timer, starting at 45 seconds. Excellent, Good, Faster and Twin Shots give extra time, as do clocks in the background, successful rescue events and end-of-stage bonuses. Getting hit by a zombie subtracts 7 seconds, projectiles subtract 5, and bosses subtract 15. Stunning a boss grants the player 10 seconds. Every successful hit on the final boss also grants two seconds, and does not require a stun. The game cannot be continued if the timer reaches zero, and at the end of each game Dr. Curien gives his analysis of the player's performance. The player may also note the average distance at which they managed to hold back the undead in metres.
