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The PSP version of Liberty City Stories has a multiplayer mode, for up to 6 players through wifi ad-hoc mode (same area). The game features 7 modes of wireless multiplayer gaming, in which various pedestrian and character models from the single player mode are available as player avatars. Rockstar removed these modes from the PS2 port of GTA Liberty City Stories.
- The first is Liberty City Survivor, a tie-in to the radio advertisement found in GTA III of a fictional reality television show of the same name. In Liberty City Survivor, players fight for themselves in a deathmatch. The first player to reach a certain number of kills, or with the highest score when the timer runs out is the winner. Players can also play in teams, or "gangs". Ultimately players will be able to choose from over 60 different characters, and play on all three islands, depending on progress through the single player storyline, but from the get go, it is limited to Portland with a generous nine characters to choose from. The mode is similar to the "LC Survivor" mode in GTA Chinatown War's multiplayer.
- The second mode of play is Protection Racket, in which players attack an opposing player's gang base in order to destroy four limos while the other gang tries to protect its limos. When time runs out, or a gang destroys the other gang's limos, a new round begins with the gang roles reversed.
- In Get Stretch, players try to steal the other gang's gang cars from their base and take it to their base. The game ends when a gang reaches the score limit or time runs out.
- In The Hit List, players have to kill the Marked player as quickly as possible. Survive as long as possible when you are the Mark. In the first round, one player will be chosen randomly as the Mark, all other players must try to kill the Marked player as quickly as possible. Once a Marked player has been killed, a different player will be randomly chosen to be the Mark. Making a successful kill on a Marked player will award you with extra time that is added to your survival time at the end of the game. Once all players have been Marked and killed, the player with the longest survival time wins. The Marked player's vehicle will take damage over time.
- In Street Rage players must drive through the checkpoints to get to the finish line first. Players are allowed to change vehicles and shoot other players to win the race. Players will be automatically re-spawned in a vehicle on the track after a short period of time if they do not have a vehicle or if they have been killed. The player that finishes the race first wins. The Sticky Tires powerup improves vehicle handling for limited time, while Instant Repair is just that, an instant repair for your vehicle.
- The Wedding List is a free-for-all game where players must collect cars scattered throughout the city and deliver them to shipping crates. Only players in the vehicles to be collected will know the destinations of the shipping crates. Cash is awarded based on the condition of the cars when they are delivered. Once all the cars have been collected and delivered, the player with the most cash wins this game mode.
- In Tanks for the Memories players have to be the first to the tank and try to survive the target Tank Time. Other players must try to destroy the tank before the Tank Time is reached. If this happens, the player who caused the most damage to the tank will occupy a new tank and, as before, it must be destroyed as quickly as possible. This continues until a player reaches the Tank Time; this player is declared the winner.