This study investigated a new three-species host-parasitoid-hyperparasitoid system, which considers the mutual interference functional response. We establish the existence and uniqueness of positive equilibrium points and demonstrate that the presence of hyperparasitoids always leads to an increase in the level of host population equilibrium. In addition, we demonstrate that the quest constant b of hyperparasitoids is proportional to the host equilibrium level, which is critical for the efficiency of biological control programs. We provide parametric conditions for the local stability of the proposed system. Some numerical simulations are performed to validate our theoretical results.