We consider the question of lifting stable equivalences of Morita type to derived equivalences. One motivation comes from an approach to Broué’s abelian defect group conjecture. Another motivation is a conjecture by Auslander and Reiten on stable equivalences preserving the number of non-projective simple modules. A machinery is presented to construct lifts for a large class of algebras, including Frobenius-finite algebras introduced in this paper. In particular, every stable equivalence of Morita type between Frobenius-finite algebras over an algebraically closed field can be lifted to a derived equivalence. Consequently, the Auslander–Reiten conjecture is true for stable equivalences of Morita type between Frobenius-finite algebras. Examples of Frobenius-finite algebras are abundant, including representation-finite algebras, Auslander algebras, cluster-tilted algebras and certain Frobenius extensions. As a byproduct of our methods, we show that, for a Nakayama-stable idempotent element e in an algebra A over an algebraically closed field, each tilting complex over eAe can be extended to a tilting complex over A that induces an almost ν-stable derived equivalence studied in the first paper of this series. Moreover, the machinery is applicable to verify Broué’s abelian defect group conjecture for several cases mentioned in the literature.