The third installment of the Ratchet & Clank franchise incorporates new elements of gameplay not seen previously in the series, including online and offline multiplayer capabilities that will appeal to a wide variety of players. Ratchet and Clank: Up Your Arsenal returns gamers to Planet Veldin, the setting of the original Ratchet & Clank, where the duo set off on a gripping new adventure through a multitude of diverse planets to fight for galactic peace. Players can earn up to 20 weapons (including online and offline) with up to four levels of upgrades for most weapons, plus new high-tech gadgets to help them through their journey.

After word spreads of Ratchet and Clank's recent conquest in Ratchet & Clank: Going Commando, Clank finds himself recognized as an interstellar robot of mystery and intrigue after starring in his own television series, Secret Agent Clank. While Ratchet is dismayed by his new sidekick status, the feelings are put aside when the twosome is called together by the Galactic President to bring peace to the universe. They find themselves traveling back to Planet Veldin to battle Dr. Nefarious, a robotic supervillain who has devised a diabolical scheme to wipe out all organic life in the galaxy. To reach his goal, he has instructed the Tyhrranoids, a race of multi-eye aliens to annihilate the organics. However, while Dr. Nefarious is aware that if the Tyhrranoids are successful, they will end up causing their own extinction, the Tyhrranoids are not aware of this danger.

The multiplayer gameplay featured in Ratchet & Clank: Up Your Arsenal is naturally suited for both the offline and online universe because it includes the variety of weapons, gadgets, vehicles and gameplay made famous throughout the Ratchet & Clank franchise. For those who want to experience the split screen multiplayer capabilities, up to four players can play offline, while the multiplayer online mode accommodates up to eight players over a broadband connection. In addition, six new levels are introduced for online play, featuring several elements that encourage team-based activities in modes such as capturing an enemy's base. For example, destructible environment obstacles in battlefield environments create strategic gameplay decisions and general mayhem. Commandeering multiple vehicles further encourages strategic co-op gameplay by allowing players to work together as one person navigates the vehicle while the other works its weapon's arsenal.