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The game was released in North America on March 18, 2003, and was developed by Sunsoft. The previous three games in the series, Clock Tower ~The First Fear~, Clock Tower and Clock Tower II: The Struggle Within were developed by Human Entertainment and published by ASCII Entertainment and Agetec Incorporated. Clock Tower 3 is the first game in the series to incorporate direct control over the protagonist, as opposed to the point-and-click mechanics in the previous games. It is also the first game in the series not to feature multiple endings.
- Alyssa Hamilton - The game's protagonist. Without knowing why, she was sent to a boarding school by her mother and told not to return for six years.
- Nancy Hamilton - Alyssa's mother. The two are very close, but Nancy appears to be hiding something from Alyssa.
- Dennis Owen - A boy that Alyssa knew in primary school three years prior to the game's events. Dennis appears unexpectedly at Alyssa's home near the start of the game. He appears to have a crush on her, and is obsessed with staying as close to her as possible.
- Dick Hamilton - Alyssa's grandfather, who took the task of raising her after her father died. He seems to dislike Nancy's choice of husband, and is cold hearted toward him. Three years before events of the game, Dick disappeared from the Hamilton Household and has not been seen since. His disappearance depresses Alyssa, and she anxiously awaits his return.
- Sledgehammer - Sledgehammer is the first boss encountered in the game, found bludgeoning a twelve-year-old pianist to death on Christmas Eve 1942. Prior to becoming Sledgehammer, he was known as Robert Morris, a stonecutter.
- Corroder - Corroder is the second boss encountered in the game; he is seen blinding an elderly woman and her adult son before throwing them both alive into a drum of acid in 1963. Corroder's real name, John Haigh, as well as his modus operandi of killing his victims, is inspired by the real John Haigh, who was known in Britain as the Acid Bath Murderer.
- Chopper - Born in 1655 as Harold Powell, the game's third boss was a woodcutter who was seriously deformed at birth and as a result, was taunted and cursed for his appearance. When Powell was 17, he proposed marriage to Emily Dickins, the innkeeper's daughter, but was cruelly rejected. In turn, he dismembered Emily with his axe and continued to murder other women in the same fashion for 2 more years, until he was later caught and trialed.
- Scissorman - Ralph, a subordinate who served under Lord Burroughs. Origins are unknown. He, like his sister, have a fascination for blades; scissors in particular.
- Scissorwoman - Jemima, a subordinate who served under Lord Burroughs. Origins are unknown. She, like her brother, have a fascination for blades; scissors in particular.
After receiving a strange letter from her mother encouraging her to hide until her fifteenth birthday passes, Alyssa instead returns home from boarding school. When she arrives, her mother is gone and only one of the lodgers is in residence, a wayward stranger known as Dark Man.
In Alyssa's concern for her mother, she decides to check her parent's room to find not a clue; however, almost randomly a piano starts to play wildly. Alyssa becomes terrified to such a point that she runs out of the bedroom only to be transported to London during World War II.
After evading the bombing, Alyssa continues to a tailor shop where she sees a grisly murder of a little girl being killed by a man wielding a sledgehammer, who then stalks Alyssa in an attempt to kill her.
Players assume the role of Alyssa Hamilton, a schoolgirl approaching her 15th birthday, on her quest to find her mother and save herself from Dark Man. Progress through the game entails finding items to unlock new areas, fleeing and hiding from Subordinates (the boss characters) and eventually defeating each Subordinate in battle.
Innocents slain by the subordinates haunt each stage and will attack Alyssa if she approaches them, sending her into panic. In order to pacify these spirits, an item of sentimental value must be found and returned to the spirit's corpse, which always lays near the area being haunted.
After each scenario, Alyssa must confront the subordinate who has been stalking her. At this point, her holy water bottle transforms into a longbow, allowing her to fight back. Each battle is confined to a single area, and the player must defeat the subordinate in order to progress. The health of both Alyssa and the subordinate is measured by two life bars which appear on-screen. Alyssa must dodge or duck attacks whilst firing arrows at her attacker. In order to inflict considerable damage, shots must be powered-up. These shots tether the subordinate to the ground. Whilst powering-up the shot, Alyssa must stand still and cannot adjust her aim, leaving her vulnerable to attacks and making it possible for her enemy to move out of her line of sight. If the boss is transfixed with multiple powered-up shots, Alyssa performs a highly damaging attack with her next shot, killing or severely wounding the subordinate.