The role of moist convective processes in the heat and moisture budgets of the 22 June 1981 tropical squall line is investigated. Detailed kinematic structure from Doppler radar observations, and thermodynamic and microphysical fields diagnosed from a steady-state model respectively presented in Parts I and II of this paper, are used to estimate the total apparent heat source and moisture sink. The relative contributions of the system components (the convective-scale component associated with the leading convective region, and the mesoscale component of the trailing stratiform region) and of the physical processes (latent heat release and eddy transports) are examined. Consistent results are examined which are obtained in qualitative agreement with those of previous studies. Condensation and evaporation, through the release of latent heat, are the dominant terms in the total apparent heating profile although the melting process is also important. The total apparent moisture sink is also dominated by condensation and evaporation. However, the eddy moisture flux has an important influence on the vertical structure. Although the stratiform-region heating and moistening profiles display common features with other studies (i.e., upper level heating and drying due to condensation in the mesoscale updraft, and lower level cooling and moistening due to rain evaporation in the mesoscale downdraft), the total heat and moisture budgets present significant differences. The total apparent heat source is marked by a deep layer of cooling, while the total apparent moisture sink has a single peak observed in the middle troposphere. This differs fundamentally from the net heating and the double-peak structure of the moisture sink, often seen in tropical budget studies. The differences primarily lie in the structure of the convective-region profiles. The convective-scale heating profile indicates a net cooling in the lower troposphere, mainly due to the evaporation of precipitation. This cooling is explained by a deep subsaturated layer where convective precipitation evaporates. The convective-region moisture sink profile exhibits drying through the full depth of the troposphere, but with a peak at middle levels. It is found that this relatively high position of the drying peak results from the specific contribution of the eddy moisture transport in the convective region, which is concentrated in the low-to-middle troposphere and which tends to raise the drying peak due to condensation in convective updrafts. From this particular impact of convective eddies, an interpretation of the occurrence of a double-peak structure in the total apparent moisture sink is proposed. It is also found that ambient dry air entering the system at midlevels strongly modifies the vertical exchange by convective updrafts by limiting it to the lower part of the troposphere.