The H3 launch vehicle is currently under development as Japan's next flagship launch vehicle that will replace the H-IIA/H-IIB. The objectives of the H3 launch vehicle are to ensure "competitiveness in the global commercial market" and "assured access to space", as well as to maintain and strengthen the Japanese industrial base by obtaining orders for commercial satellite launches. Mitsubishi Heavy Industries Ltd. (MHI) has organized the vehicle development as the primary contractor and taken charge of the development of the engine system. The development is currently in the final stage of the test and verification phase. System tests and LE-9 engine firing tests are underway toward the launch of the first vehicle in JFY2021. This report provides overviews the current development status of the H3 launch vehicle and outlines the future prospects.