Yoshi and Baby Mario are back in Yoshi's New Island, the third installment in the beloved franchise. The series' fun game-play mechanics such as Yoshi's Flutter Jump, Ground Pound and Egg Throw return, but now Yoshi knows a ton of new tricks too. Yoshi gets to bash and thrash his environment by throwing around Mega Eggdozers and Metal Eggdozers. Yoshi also can transform into a variety of objects, such as a jackhammer or a submarine, both of which can be manipulated using the Nintendo 3DS gyro controls. A certain type of star even transforms him into Super Yoshi, giving him the ability to fly through the sky or run along walls and ceilings. Players who are having trouble completing a level might see the appearance of Flutter Wings, which let Yoshi fly through the air.

Yoshi's New Island takes place immediately following the events of Super Mario World 2: Yoshi's Island, where a stork delivers twins Baby Mario and Baby Luigi to a couple in the Mushroom Kingdom assumed to be their parents. The opening of Yoshi's New Island reveals that the stork had delivered the babies to the wrong couple. The stork reclaims the babies and sets off to locate their real parents, but is ambushed by Kamek in mid-flight. Kamek captures the stork and Baby Luigi, but Baby Mario falls and reunites with the Yoshi clan on Egg Island, a floating island that was conquered by Baby Bowser. Baby Mario can telepathically sense Baby Luigi's location; the Yoshi clan agrees to escort Baby Mario across the island and rescue Baby Luigi. Once Baby Mario and Yoshi make it to Baby Bowser's castle, Baby Bowser wakes up and jumps on Kamek who attempted to get Baby Mario and Yoshi out. When Baby Bowser tries to ride Yoshi, Baby Bowser is defeated. Kamek uses a Giant Magical Hammer to make Baby Bowser gigantic. After defeating Giant Baby Bowser, Yoshi proceeds to rescue the captured stork and save Baby Luigi only to be met by Adult Bowser, who appeared after warping through space and time. After Yoshi defeats Adult Bowser, Kamek once again uses a Giant Magical Hammer to make adult Bowser gigantic. After defeating Adult Bowser, Yoshi once again comes to the stork and Baby Luigi, and the stork delivers Baby Mario and Luigi back to their true home. The moving helping warp pipe, who helped Yoshi throughout the journey, is seen at the end is revealed to be adult Mario who also travelled back through time and space to help Yoshi to succeed and returns to his own timeline.