The main plot of RoboCop 3 involves RoboCop finding a new family, as he has apparently given up hope of seeing his wife or son again. He forms a bond with an orphaned little Japanese-American computer whiz girl named Nikko, as well as coming into contact with an underground paramilitary resistance. The resistance, built up of underprivileged urban families, formed after Omni Consumer Products (OCP) began relocating them in order to build Delta City. RoboCop also finds one of the original scientists from the first two films, Dr. Marie Lazarus, who built and operated on him, and has left the organisation after becoming disillusioned.

Meanwhile, OCP is on the verge of bankruptcy and hires a brutal mercenary security force, the Rehabilatators ("Rehabs" for short), under Commander Paul McDaggett in order to create conflict and destruction in Old Detroit and forcibly relocate the residents, killing some (including Nikko's parents) in the process. The Police force is gradually superseded by OCP's mercenaries, and violent crime begins to spiral out of control once more. The Delta City dream of the former CEO and "Old Man" lives on through the help of a Japanese Zaibatsu, the Kanemitsu Corporation, who bought a controlling stake in OCP. Kanemitsu sees the potential in the citywide redevelopment, and moves forward with it own plans to remove the current citizens. The company develops and uses its own ninja robots (called "Otomo") to help McDaggert and the current OCP CEO overcome the resistance of the defenders of the impoverished neighborhood. When RoboCop tries to defend unarmed civilians from the Rehabs, his longtime partner, Anne Lewis, is killed by McDaggett, and RoboCop joins the resistance.

RoboCop is able to defeat the Japanese robots with help from his new allies and some new equipment designed by Dr. Lazarus, who joins him in the resistance. The rebels also receive the aid of the Detroit City police department when McDaggert decides on an final all-out strike using street punks as additional help, and Robocop ends up destroying OCP headquarters with McDaggert still in it. The company is finally driven into bankruptcy.

As Old Detroit is being cleaned up, Kanemitsu arrives and his assistant tells the OCP CEO that he's fired. Kanemitsu appears in front of RoboCop and and his companions, bowing to RoboCop. When the OCP CEO asks RoboCop his name, he replies "My friends call me Murphy, you can call me RoboCop."

The film was directed by Fred Dekker, a director primarily known for cult horror films. Popular graphic novelist Frank Miller returned to write the screenplay for the film. Major themes of the plot were taken from the Miller's original (rejected) draft of Robocop 2. The star of the previous films, Peter Weller, did not reprise the role as he was starring in Naked Lunch. Robert John Burke was signed to play the cyborg character in his stead. The RoboCop suit worn in the movie was originally built for RoboCop 2 (1990). Since Robert John Burke is taller than Peter Weller, he complained that wearing it was painful after a short time. Other important casting changes had to be made for the third film. The actor who played the OCP CEO from the previous two films, Dan O'Herlihy, and his successor are both absent from this film. The cast changes meant that Nancy Allen, Robert DoQui, and Felton Perry are the only three actors to appear in all three films.

Pre-production problems continued with the film aiming for a PG-13 rating; even after the success of the first two films which had been rated R. The profanity, graphic violence, and references to illicit drugs and prostitution were all reduced, or taken out altogether, causing the gritty environment of the first two films to be severely diluted.

RoboCop 3 went into production soon after RoboCop 2 was complete. Although completed in 1991, RoboCop 3 would languish on the shelf until 1993 as Orion Pictures went through bankruptcy and was bought out. RoboCop 3 earned $4.3 million on its opening weekend, ending its run with $10.6 million domestically, far short of recouping its estimated $22 million production budget.

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