The ZH3 can be integrated into a system as a standalone DAC via its USB-C, optical and coaxial inputs, as a high-power headphone amplifier via its headphone outputs, or as a preamplifier via its variable RCA and XLR outputs.

The RCA line input also allows analog sources to be connected. Inputs and output modes can be selected using the front-panel multifunction control or the included infrared remote control, while the built-in display shows the current settings.

Digital signal processing is built around the AKM AK4493SEQ D/A converter and XMOS XU316 USB processor, while four OPA1612 op-amps are used in the analog stage. Via USB, the ZH3 can accept PCM signals at up to 32-bit/768 kHz and DSD512.

The optical and coaxial S/PDIF inputs support resolutions of up to 24-bit/192 kHz, making it easy to integrate compatible digital sources into the system.

Fosi Audio's proprietary dual-supply, push-pull differential and complementary amplifier circuit uses a fully balanced architecture.

With three gain levels and a recommended impedance range of 16–300 ohms, the ZH3 can be used flexibly with both sensitive in-ear monitors and more demanding full-size headphones.

In PO mode, the 4.4 mm and 6.35 mm headphone outputs are active. In AUX mode, the levels of the RCA and XLR line outputs can be controlled using the ZH3's volume control, allowing the device to be used as a preamplifier when connected directly to active speakers or a power amplifier.

In LO mode, the ZH3 operates purely as a DAC: the RCA output provides a fixed 2 Vrms signal, the XLR output provides a fixed 4 Vrms signal, and the volume cannot be adjusted.

The headphone output has separate bass and treble controls, allowing the sound to be tailored to the headphones, the recording or personal preference.

In BYPASS mode, the signal bypasses the tone-control circuit, disabling the bass and treble settings. The tone controls, bypass and gain adjustments are available only in PO mode, meaning headphone output mode.

UAC 2.0 enables high-resolution music playback with modern computers and smartphones, while UAC 1.0 ensures compatibility with game consoles such as the PlayStation 5 and Nintendo Switch. The UAC mode can be selected only when using the USB input.

The 12 V trigger input and output enable synchronized power-on and power-off with other devices that support trigger control.