Egg Hammer 3, as the name replies, is an actual hammer. It is mostly gray with black and yellow stripes on it and yellow hammerheads. The Egg Mobile is on the top of the hammer between the heads and G-merl which the entire hammer is connected to its pedestal at the bottom with a rounded grey chain.
When beginning this boss battle, the player first faces off again G-merl. He simply moves left to right and back again across the screen, and can be defeated by attacking him four times (or two times on the game's Easy mode).
After G-merl's defeat, the player will square off against the Egg Hammer 3. While the boss is stationary, the hammer (and Eggman's cockpit) moves downwards left or right, stretching to whack the player where they are standing as it does so. If the player stands directly under the hammer, it will come crashing down on them. These attacks are easily avoided, and Eggman can be goaded into swinging to the left or right to make the cockpit easy to hit. The Egg Hammer 3 can be defeated with eight hits (six on Easy mode). Once defeated, Eggman will flee and the player will automatically advance to Sunset Hill.