Sonic The Hedgehog 3 takes place on Angel Island, a mysterious Floating Island which holds many special powers. The source of these powers are the Chaos Emeralds and the Master Emerald. In Sonic The Hedgehog 2, Sonic&TAiLS thought that they had destroyed the Death Egg, which was Dr. Robotnik's heavily armored space ship. Instead, Dr. Robotnik managed to crash land it on the Floating Island. After Learning that the island is able to float in the sky by harnessing the power of the Chaos Emeralds, the Doc decides to steal the emeralds so he can repair his Death Egg ship.
To obtain the emeralds, Dr. Robotnik tricks Knuckles, the guardian of the Floating Island's Master Emerald. He also tells Knuckles that Sonic&TAiLS are the ones trying to steal the Master Emerald.
Between battling the new types of Badniks and trying to outsmart Knuckles, Sonic&TAiLS have their work cut out for them once they arrive on the Floating Island and search for Dr. Robotnik to stop his evil plans again.