The Tandy Color Computer 3 was the successor of the CoCo 2. The CoCo 3 came with 128KByte of RAM, an analog RGB video port for better video, enhanced 640x192 pixel graphics, a 64-color palette and more. All the ports that were on the previous model of the CoCo were also present on the CoCo 3.

The CoCo 3 came with Disk Extended Color basic 2.1 built in. This was an enhanced version of Microsoft Basic, similar to the BASIC of the CoCo 2, but with extra commands and functions for the higher graphics resolutions of the CoCo 3.

RAM could be expanded to 512KByte, and after market upgrades have achieved up to 8MByte of RAM. The Multi-Pak 4-port bus expander allowed the use of extra controllers for floppy disk and hard disk drives (SCSI, IDE, MFM, RLL), true RS-232 devices and MIDI instruments.

The CoCo 3 was an 8-bit computer which set it apart from Atari and Commodore, both of which were using the 68000 processor at the time. This architecture forced the use of bank switching to access all of the RAM. To improve speed, teh CoCo 3 had an interrupt controller which eliminated a lot of the slow timing loops used in the previous CoCo's.

A prototype of the CoCo IV was made by Tandy, but that never made it to market.

The Motorola 6809 is an 8-bit microprocessor with some 16-bit features. It was designed by Motorola's Terry Ritter and Joel Boney and introduced in 1978. Although source compatible with the earlier Motorola 6800, the 6809 offered significant improvements over it and 8-bit contemporaries like the MOS Technology 6502, including a hardware multiplication instruction, 16-bit arithmetic, system and user stack registers allowing re-entrant code, improved interrupts, position-independent code and an orthogonal instruction set architecture with a comprehensive set of addressing modes.

The MC6847 is a video display generator (VDG) first introduced by Motorola and used in the following machines (this is not a full list):