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The great hero Latok, the descendant of the war god Duel, has returned to his hometown Fearless, where he lives peacefully with his mother. But one day, a messenger brings terrible news: the castle of Farland was attacked, the king, the princess, and countless soldiers brutally slain. Zomu Dizae, the third and the final demon commander of the dark world Zekisis (Latok has defeated the other two, Badu and Gospel), has arrived. He is aided by the treacherous Necromancer, who turned the soldiers of Farland into monsters. Will Latok be able to defeat the evil once again?

Xak III: The Eternal Recurrence is an action RPG, similar in gameplay style to its predecessors, but also incorporating some elements first introduced in Tower of Gazel, such as the ability to jump and having companions (although this feature is much more limited here). Jumping ability is crucial in many cases, as there are obstacles that can only be avoided by jumping over them. Latok starts at level 50, but still can gain experience points and become stronger. A new (and very useful) feature is hit points restoration, which occurs when Latok is standing still. To counter that, enemies can re-spawn, which means that there aren't many completely safe areas in the game.