After you choose a new game, you will be given a choice between a male and female character. You can also import your ME2 character.

In the next screen, you get to choose your experience. You will be able to change these settings any time in the options menu.

Action: Jump right into the action as the iconic Commander Shepard. Combat difficulty is adjustable. Conversations play as cutscenes.
Role Playing: The traditional Mass Effect experience. Customize your character and choose dialog responses. Combat difficulty is adjustable. This is the default mode.
Story: Customize your character. Experience and control the interactive story without difficult combat.

It will tell you that by order of Alliance Command, you are being reinstated to active duty and to confirm your military service records. Input your first name (last name will always be "Shepard" and cannot be changed)

Next, you can customize your appearance. You can choose the default appearance, or a custom one. You can also accept imported face, if you imported your character from Mass Effect 2. Choosing the custom one lets you customize your character's look.

Mass Effect 3 Character Creation

The following features are customizable:

Cycle Presets

You can choose between several presets. Use this as a starting point for your character. Find the preset closest to the way you want your character to look, and start from there.

Facial Structure
You can customize your facial structure, skin tone, and complexion

Options here are Neck Thickness, Face Size, Cheek Width, Cheek Bones, Cheek Gaunt, Ears Size, and Ears Orientation

You can change Eye Shape, Eye Height, Eye Width, Eye Depth, Brow Height, and Iris Color

You can adjust the Chin Height, Chin Depth, Chin Width, and Jaw Width

Here you can choose the Mouth Shape, Mouth Depth, Mouth Width, Mouth Lip Size, and Mouth Height

This allows you to change the Nose Shape, Nose Height, and Nose Depth

Select the Hair Style, Beard, Brow, Hair Color, and Facial Hair Color

Makeup (Female Only)
Customize your character's Blush Color, Lip Color, and Eye Shadow Color.

You can Reset a individual feature. You can also copy and paste a code, in case you want to experiment further but also want to be able to go back to the way you looked before.

You can turn your character's head, to see how he looks from different angles.

Once you accept your character's looks,  you will choose your class:

Soldiers are pure combat specialists: no one is tougher or more suited to taking down enemies with barrages of gunfire. Soldiers have thorough weapons training and can use all special ammo types as well as grenades. High-level operatives are outfitted with ocular synaptic processors that allow them to focus on targets with lethal accuracy.
Soldier Powers:  Adrenaline Rush, Concussive Shot, Frag Grenade, Incendiary Ammo, Disruptor Ammo, Cryo Ammo

Infiltrators are tech and combat specialists with the unique ability to cloak themselves from visual and technological detection. Their inventory is stacked with a wide variety of weapons, equipment and powers. Infiltrators are deadly at any range, but particularly so with a sniper rifle. When scoping a target, superior reflexes take over, time momentarily slows down, and the infiltrator finds an easy picking.
Infiltrator Powers: Disruptor Ammo, Cryo Ammo, Incinerate, Tactical Cloak, Sticky Grenade, Sabotage

Vanguards are feared for their high-risk, high-reward combat style, closing quickly on enemies and destroying them at short range with weapons and biotic abilities. they are outfitted with L5n implants, enabling them to perform a biotic charge that strikes the opponent with incredible force while bringing the Vanguard in for close-range combat.
Vanguard Powers: Incendiary Ammo, Cryo Ammo, Biotic Charge, Nova, Shockwave, Pull

Sentinels are unique, bringing both tech and biotic abilities to the battlefield. In addition, to complete weapons training, Sentinels are equipped with an advanced shield that makes taking cover much less necessary and rushing their enemies much more productive. This armor systems can also be detonated to blast nearby enemies.
Sentinel Powers: Throw, Warp, Lift Grenade, Tech Armor, Overload, Cryo Blast

Adepts are biotic specialists, capable of disabling and killing enemies with raw biotic power. While they lack advanced combat training, they are best at defeating enemies without firing a shot. They are outfitted with L5x implants that can spawn a micro-singularity, damaging enemies and pulling them into the air.
Adept Powers: Warp, Throw, Shockwave, Singularity, Pull, Cluster Grenade

Engineers are tech specialists, the most effective class at disabling the defenses of the toughest enemies or incapacitating them to render them harmless. In combination with their weapons training, Engineers have the unique ability to spawn combat drones that can harass enemies or force them out of entrenched cover positions.
Engineer Powers: Incinerate, Overload, Cryo Blast, Combat Drone, Sabotage, Sentry Turret

After choosing your class, you can choose your psychological profile - the details of your personal history:

Both of your parents were in the Alliance military. Your childhood was spent on ships and stations as they transferred from posting to posting, never staying in one location for more than a few years. Following in your parents' footsteps, you enlisted at the age of 18.

You were born and raised on Mindoir, a small border colony in the Attican Traverse. When you were 16, slavers raided Mindoir, slaughtering your family and friends. You were saved by a passing alliance patrol, and you enlisted with the military a few years later.

You were an orphan raised on the streets of the great megatropolises covering Earth. You escaped the life of petty crime and underworld gangs by enlisting with the Alliance military when you turned 18

Next, you update your service history:

Sole Survivor
During your military service, a mission you were on went horribly wrong. Trapped in a life-threatening situation, you had to overcome physical torments and psychological stresses that would have broken most people. Everyone around you fell, and you alone survived to tell the tale

War Hero
Early in your military career you found yourself facing an overwhelming enemy force. You risked your own life to save your fellow soldiers and defeat the enemy despite the impossible odds. Your bravery and heroism earned you medals and recognition from the Alliance fleet.

Throughout your military career, you held fast to one basic rule: get the job done. You've been called cold, calculating, and brutal. Your reputation for ruthless efficiency makes people wary of you, but when failure is not an option, you are the one to call.

Next, choose the best option to indicate which describes your experience with significant combat loss:

The deaths of numerous squadmates and friends have begun to play a significant role in Commander Shepard's psychological profile. The burden of inevitable combat loss after so many high-risk missions weighs heavily on Shepard.

Note: Numerous means that Either Kaidan or Ashely, as well as many other crew members, died. There will be a memorial later in the game aboard the Normandy mentioning those deaths, if you choose this option.

Kaidan Alenko
Lieutenant Kaidan Alenko was killed in action--the direct result of an order issued by Commander Shepard. The only other survivor of the incident was gunnery Chief Ashely Williams. Shepard and Williams's shared loss of Alenko created a strong bond between them, although the incident has had a lingering psychological effect.

Ashley Williams
Gunnery Chief Ashley Williams was killed in action--the direct result of an order issued by Commander Shepard. The only other survivor of the incident was Lieutenant Kaidan Alenko. Shepard and Alenko's shared loss of Williams created a strong bond between them, although the incident has had a lingering psychological effect.

Finally, you get a chance to review your character, including Name, Origin, Reputation, Class and Combat Loss. You can go back and make changes, but once you confirm your selections and start the game, you will not be able to make any additional changes to your character.