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Featuring a 5.1 megapixel Super CCD HR imager and Fujinon 3x optical zoom lens, the Fujifilm FinePix Z3 is a replacement for the existing FinePix Z1 model (an intermediate model from Europe and Asia, the FinePix Z2, was not offered for the US market). The Fuji Z3 retains much the same styling and lens as its predecessor, although the body has been updated somewhat. (There's also a new color choice on offer, in addition to the original silver - an attractive metallic blue). Although the Z3 actually uses the same fifth generation Super CCD HR sensor as the original Z1, Fuji has increased the maximum ISO sensitivity from 800 to 1600. Fuji USA is referring to this as "image stabilisation", although it should be noted that this isn't the same thing as mechanical stabilisation systems - although it offers the ability to freeze not only camera shake but moving subjects as well, it will come at the expense of some extra noise / reduced image detail.

Other features of the Fuji FinePix Z3 digital camera include Fuji's "Natural Light" shooting mode that allows low-light photos without unflattering flash - great for birthday parties! - as well as the company's i-Flash intelligent flash metering system. The Fuji Z3 offers image resolutions up to 2592 x 1944 pixels, 256-zone TTL metering, VGA movie mode, and fourteen scene modes, plus xD-Picture Card storage, 10MB of built-in memory, and a large 2.5" LCD display with 230,000 pixels.

The Fujifilm Z3 ships from July 2006 at a price of $279.95 - a whopping 38% below the original list price of the FinePix Z1 announced just over a year beforehand.