Yes.... that's the whole idea behind Raid5 (to provide fault tolerance) although, you'll probably see I/Os slow to a crawl until you replace the failed drive and rebuild / reinitialize the set.
It's a very good idea in that type of configuration (if your hardware raid card / firmware (software) supports it) to configure something called a "Hot Spare" that's a 4th hard drive just hanging out, ready to jump in for the failed drive.
Most, but I suppose not all, hardware raid controllers support that setup.