By the time production began, Keiji Inafune, a major contributor to the Mega Man franchise, had transitioned from his role as an artist to director, producer, and writer. Starting with Mega Man X2, Inafune wanted to use a computer virus as a plot device, something he considered a more interesting idea than a tangible villain. Inafune's other duties included merchandising the game into toys and trading cards. Although the game's scenario, character designs and artwork were done at Capcom, much of the actual game design was sub-contracted to Minakuchi Engineering, who had previously developed most of the Mega Man games on the Game Boy along with the compilation game Mega Man: The Wily Wars for the Sega Mega Drive. Inafune recalled experiencing "psychological turmoil" over allowing "outsiders" to handle the game's development. Inafune's only illustrative designs for the game were the characters X, Zero, and Vile. Inafune admitted being very "possessive" of Zero, which he had a vested interest in since the character's creation for the first Mega Man X. All of the designs for the game's other characters, bosses, and its minor enemies were divided among artists Hayato Kaji, Tatsuya Yoshikawa, Shinsuke Komaki, and Kazushi Itou.

Mega Man X3 is graphically similar to its two predecessors, and even utilizes the SNES Cx4 from Mega Man X2. This digital signal processor cartridge chip allows for basic 3D graphical effects such as rotation, enlarging, and shrinking of wireframe objects. In Japan, the game was released on December 1, 1995. In Europe it was released on May 15, 1996. It was released on January 4, 1996 in North America.

A port of Mega Man X3 was released on the Sega Saturn and PlayStation in Japan in April 26, 1996 and in Europe in March 1997. Capcom stated that it was licensing these versions to a USA company for release in North America, but ultimately they were never released in the region. A Windows port of this 32-bit edition was released in Japan in 1997 and in North America and Europe in 1998. The port versions feature additional animated full-motion video cutscenes, rearranged remixed music tracks, and completely different sound effects than the original SNES version. A port for the 3DO Interactive Multiplayer was announced in Japan in 1996, but was not released. The Japanese PlayStation version of Mega Man X3 was eventually re-released as part of the Sony "The Best for Family" line of budget titles. The PlayStation version of Mega Man X3 was included in Mega Man X Collection, released for the PlayStation 2 and GameCube in North America in early 2006. Mega Man X3 was released on EZweb-compatible mobile phones in Japan in July 1, 2010. The SNES version of Mega Man X3 was released on the Wii U Virtual Console in North America on August 28, 2014, in Japan on October 8, 2014, and the PAL regions on November 6, 2014. It was re-released for Nintendo Switch, PlayStation 4, Windows, and Xbox One as part of Mega Man X Legacy Collection which was released on July 24, 2018, worldwide and July 26, 2018, in Japan.