Phase 3 is the last introduction phase of Balloon Fight on the NES.
There are three small platforms with stalactites floating in a diagonal line, with two Green (Level 2) Balloon Birds on the lower two platforms in this line and a Yellow (Level 3) Balloon Bird on the highest one. There is also a very small platform near the top of the screen above the lowest stalactite platform, which holds a Yellow Balloon Bird. There is a small platform near the water in the middle of the screen which holds a Pink (Level 1) Balloon Bird. There are two Clouds in this level, but no Flippers.
- Like Phases 1 and 2, this phase never repeats.
- This is the first appearance of the Yellow Balloon Birds at the start of a level.