The "final" installment of the trilogy was based around fighting the evil Nikademus and finishing him for good. Released in 1987, this time Nikademus was attempting to take over the entire world and it was up to the party to stop him.

Phantasie III maintained the style of the original two and improved upon the graphics on all platforms except the DOS version. The combat engine also saw a few upgrades, adding specific wound locations, with characters now able to have their head, torso, or a limb specifically injured, broken, or removed. It was also now possible to have a more tactical battle line-up, with the ability to move characters to the front, middle, or rear of the party. The game also improved upon the spell list and added a larger variety of weapons and equipment. The game also had two possible endings depending on whether the characters chose to fight Nikademus or join him.