Item 2 –	Controls and Procedures

2(a) –	The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

2(b) –	There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 –	Exhibits

	Certifications – Attached hereto

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BlackRock MuniYield Quality Fund III, Inc.

	By:	/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock MuniYield Quality Fund III, Inc.

	Date: June 22, 2012

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	By:	/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock MuniYield Quality Fund III, Inc.

	Date: June 22, 2012

	By:	/s/ Neal J. Andrews
		Neal J. Andrews
		Chief Financial Officer (principal financial officer) of
		BlackRock MuniYield Quality Fund III, Inc.

	Date: June 22, 2012


Schedule of Investments April 30, 2012 (Unaudited)	BlackRock MuniYield Quality Fund III, Inc. (MYI)
Schedule of Investments April 30, 2012 (Unaudited)	(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Alabama — 0.4%
Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39	$	3,605	$	4,106,960
Alaska — 1.7%
Alaska Housing Finance Corp., RB, General Housing, Series B (NPFGC), 5.25%, 12/01/30		2,000		2,074,780
Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, 5.50%, 10/01/41		2,690		3,021,973
Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), 6.00%, 9/01/28		10,150		12,126,509
				17,223,262
Arizona — 0.6%
Maricopa County & Phoenix Industrial Development Authorities, Refunding RB, S/F, Series A-2, AMT (Ginnie Mae), 5.80%, 7/01/40		1,320		1,361,118
State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/27		3,725		4,155,498
				5,516,616
California — 13.1%
Alameda Corridor Transportation Authority, Refunding RB, CAB, Subordinate Lien, Series A (AMBAC), 5.40%, 10/01/24 (a)		10,000		9,961,300
California Health Facilities Financing Authority, Refunding RB:
Saint Joseph Health System, Series A, 5.75%, 7/01/39		1,550		1,754,662
Sutter Health, Series B, 5.88%, 8/15/31		3,200		3,803,520
California HFA, RB, Home Mortgage, Series K, AMT, 5.50%, 2/01/42		3,925		4,068,576
California State Public Works Board Lease, Various Capital Projects, Series A, 5.00%, 4/01/37		360		377,492
California State University, RB, Systemwide, Series A:
5.50%, 11/01/39		1,525		1,704,950
(NPFGC), 5.00%, 11/01/32		9,865		10,194,590
California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/37		3,545		3,863,341
California Statewide Communities Development Authority, RB:
Kaiser Permanente, Series A, 5.00%, 4/01/42		4,030		4,299,325
Saint Joseph Health System, Series E (AGM), 5.25%, 7/01/47		5,000		5,263,850
Sutter Health, Series D (AGM), 5.05%, 8/15/38		300		317,865

Municipal Bonds	Par (000)		Value
California (continued)
City of Redding California, COP, Refunding, Series A (AGM), 5.00%, 6/01/30	$	1,900	$	2,086,618
City of San Jose California, ARB, Series A-1, AMT, 5.75%, 3/01/34		2,300		2,550,010
City of San Jose California, Refunding RB, Series A, AMT (AMBAC), 5.50%, 3/01/32		11,965		12,622,596
Coast Community College District, GO, Election of 2002, Series C (AGM), 6.05%, 8/01/33 (b)		8,100		2,562,030
County of Sacramento California, RB, Senior Series A (AGM), 5.00%, 7/01/41		14,500		15,341,870
Dublin Unified School District California, GO, CAB, Election of 2004, Series D, 6.95%, 8/01/34 (b)		5,000		1,308,550
Fairfield-Suisun Unified School District California, GO, Election of 2002 (NPFGC), 5.50%, 8/01/28		5,800		6,276,064
Grossmont Union High School District, GO, CAB, Election of 2004, 5.41%, 8/01/31 (b)		5,110		1,905,468
Long Beach Unified School District, GO, Election of 2008, Series B, 6.54%, 8/01/34		5,000		1,575,750
Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32		1,200		1,347,552
Norwalk-La Mirada Unified School District California, GO, Refunding, CAB, Election of 2002, Series E (AGC), 6.47%, 8/01/38 (b)		7,620		1,801,292
Oceanside Unified School District California, GO, Series A (AGC), 5.25%, 8/01/33		2,500		2,753,975
Port of Oakland, Refunding RB, Series M (NPFGC), 5.38%, 11/01/27		8,030		8,138,164
Poway Unified School District, GO, CAB, School Facilities Improvement, District, Election of 2008, Series B, 6.27%, 8/01/36 (b)		10,000		2,818,700
Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 6.18%, 8/01/38 (b)		12,940		3,284,043
San Bernardino Community College District, GO, Election of 2002, Series C (AGM), 5.00%, 8/01/31		2,165		2,403,799
San Diego Unified School District California, GO, Refunding, CAB, Series R-1, 5.08%, 7/01/31 (b)		3,485		1,336,184
San Joaquin County Transportation Authority, RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36		1,830		2,195,067


Municipal Bonds	Par (000)		Value
California (concluded)
San Marcos Unified School District, GO, Election of 2010, Series A:
5.00%, 8/01/34	$	1,800	$	1,977,390
5.00%, 8/01/38		1,600		1,735,520
State of California, GO:
5.50%, 3/01/40		1,020		1,132,129
5.00%, 10/01/41		2,555		2,720,768
Series 2007-2 (NPFGC), 5.50%, 4/01/30		10		10,617
Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B, 6.14%, 8/01/36 (b)		6,545		1,854,068
West Valley-Mission Community College District, GO, Election of 2004, Series A (AGM), 5.00%, 8/01/30		3,600		3,989,376
				131,337,071
Connecticut — 0.3%
Connecticut Housing Finance Authority, RB, Sub-Series E-2, 5.00%, 11/15/31		3,235		3,423,601
Florida — 14.5%
Broward County School Board Florida, COP, Series A (AGM), 5.25%, 7/01/33		14,800		15,893,720
Broward County Water & Sewer Utility, RB, Series A, 5.25%, 10/01/34		2,250		2,551,995
City of Jacksonville, Refunding RB, Transportation, Series A, 5.00%, 10/01/30		770		854,469
Collier County School Board, COP (AGM), 5.00%, 2/15/23		5,000		5,640,400
County of Lee Florida, Refunding RB, Series A, AMT:
5.63%, 10/01/26		2,600		2,888,782
5.38%, 10/01/32		3,440		3,682,451
County of Miami-Dade Florida, GO, Building Better Communities Program:
Series B, 6.38%, 7/01/28		6,000		7,144,380
Series B-1, 5.75%, 7/01/33		3,700		4,213,153
County of Miami-Dade Florida, RB:
Miami International Airport, AMT (NPFGC), 5.38%, 10/01/25		7,500		7,567,425
Miami International Airport, AMT (NPFGC), 5.38%, 10/01/27		1,000		1,007,460
Miami International Airport, Series A, AMT (AGM), 5.50%, 10/01/41		19,020		20,080,365
Water & Sewer System (AGM), 5.00%, 10/01/39		11,700		12,668,175
County of Miami-Dade Florida, Refunding RB:
Miami International Airport (AGC), 5.00%, 10/01/40		11,000		11,245,630
Series C (BHAC), 6.00%, 10/01/23		20,095		24,846,262
Transit System Sales Surtax (AGM), 5.00%, 7/01/35		2,800		2,984,688

Municipal Bonds	Par (000)		Value
Florida (concluded)
Highlands County Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B, 6.00%, 11/15/37	$	1,750	$	2,010,260
Orange County School Board, COP, Series A (AGC), 5.50%, 8/01/34		12,000		13,265,880
Sarasota County Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, 5.63%, 7/01/39		5,135		5,514,579
The School Board of Miami-Dade County Florida, RB, COP, Series B (AGC), 5.25%, 5/01/31		1,010		1,098,113
				145,158,187
Georgia — 1.8%
Burke County Development Authority, RB, Oglethorpe Power Corp., Vogtle Project, Series C, 5.70%, 1/01/43		6,450		6,927,106
City of Atlanta Georgia, RB, General, Series B (AGM), 5.25%, 1/01/33		10,000		10,690,800
				17,617,906
Illinois — 17.8%
Chicago Board of Education Illinois, GO, Series A, 5.50%, 12/01/39		6,470		7,313,235
Chicago Park District, GO, Harbor Facilities, Series C:
5.25%, 1/01/37		4,000		4,396,880
5.25%, 1/01/40		1,505		1,650,835
Chicago Transit Authority, RB, 5.25%, 12/01/36		1,620		1,804,437
City of Chicago Illinois, ARB, General, Third Lien, Series B-2, AMT (NPFGC):
5.25%, 1/01/27		10,000		10,290,700
6.00%, 1/01/27		26,230		27,970,098
City of Chicago Illinois, GO, CAB, City Colleges (NPFGC) (b):
5.58%, 1/01/29		4,000		1,790,680
5.71%, 1/01/33		7,950		2,745,851
City of Chicago Illinois, RB, Series A:
O’Hare International Airport, General Third Lien, 5.75%, 1/01/39		9,000		10,306,890
Second Lien (AMBAC), 5.00%, 11/01/36		3,500		3,661,980
City of Chicago Illinois, Refunding RB, ARB, O’Hare International Airport, General, Third Lien, Series C-2, AMT (AGM), 5.25%, 1/01/30		16,400		16,639,440
Illinois Finance Authority, RB, Series A, 5.75%, 8/15/34		8,700		9,401,046
Illinois Finance Authority, Refunding RB, Northwestern Memorial Hospital, Series A, 6.00%, 8/15/39		5,250		6,051,412
Illinois Municipal Electric Agency, RB, Series A (NPFGC):
5.00%, 2/01/35		17,935		19,102,568
5.25%, 2/01/35		15,000		16,139,400


Schedule of Investments (continued)	BlackRock MuniYield Quality Fund III, Inc. (MYI)
Schedule of Investments (continued)	(Percentages shown are based on Net Assets)


Municipal Bonds	Par (000)		Value
Illinois (concluded)
Illinois State Toll Highway Authority, RB, Series B:
5.50%, 1/01/33	$	4,000	$	4,364,960
(BHAC), 5.50%, 1/01/33		2,000		2,193,200
Kane, Kendall, Etc. Counties Community College District No. 516 Illinois, GO, CAB, Series E (NPFGC), 5.21%, 12/15/25 (b)		5,000		2,548,500
Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Expansion Project, Series A (NPFGC) (b):
5.16%, 12/15/26		9,600		4,986,048
5.76%, 6/15/32		14,000		5,151,440
5.97%, 12/15/34		41,880		13,196,388
Metropolitan Pier & Exposition Authority, Refunding RB, CAB, McCormick Place Expansion Project, Series B (AGM), 6.25%, 6/15/44 (b)		9,430		1,676,183
Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28		1,700		1,929,092
Regional Transportation Authority, RB, Series C (NPFGC), 7.75%, 6/01/20		1,000		1,250,670
State of Illinois, GO:
5.00%, 3/01/36		970		1,019,965
5.00%, 3/01/37		390		409,133
				177,991,031
Indiana — 2.9%
City of Indianapolis Indiana, Refunding RB, Second Lien, Series B (AGC), 5.25%, 8/15/27		5,000		5,506,050
Indiana Finance Authority, RB, Wastewater Utility, 5.25%, 10/01/38		2,900		3,232,688
Indiana Municipal Power Agency, RB:
Series A (NPFGC), 5.00%, 1/01/37		3,850		4,084,696
Series B, 5.75%, 1/01/34		1,050		1,116,266
Series B, 6.00%, 1/01/39		5,000		5,727,900
Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A:
5.75%, 1/01/38		2,900		3,252,002
(AGC), 5.25%, 1/01/29		1,350		1,502,104
(AGC), 5.50%, 1/01/38		4,250		4,732,757
				29,154,463
Iowa — 3.3%
Iowa Finance Authority, RB, Series A (AGC), 5.63%, 8/15/37		12,650		13,871,104
Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT:
5.60%, 12/01/26		4,530		4,991,834
5.70%, 12/01/27		4,530		4,992,921
5.75%, 12/01/28		2,400		2,636,544
5.80%, 12/01/29		3,060		3,363,032
5.85%, 12/01/30		3,170		3,476,824
				33,332,259

Municipal Bonds	Par (000)		Value
Kentucky — 1.0%
Kentucky State Property & Buildings Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/28	$	4,000	$	4,535,800
Louisville & Jefferson County Metropolitan Sewer District Kentucky, RB, Series A (NPFGC), 5.25%, 5/15/37		5,000		5,399,400
				9,935,200
Louisiana — 0.8%
Jefferson Parish Hospital Service District No. 1, Refunding RB, Jefferson Medical Center, Series A (AGM), 6.00%, 1/01/39		1,320		1,490,056
New Orleans Aviation Board Louisiana, RB, New Orleans Aviation, Series A, AMT (AGM), 5.25%, 1/01/32		6,505		6,896,536
				8,386,592
Massachusetts — 3.8%
Massachusetts HFA, RB:
S/F Housing, Series 128 AMT (AGM), 4.88%, 12/01/38 (c)		7,955		8,096,838
Series B, 7.00%, 12/01/38		3,150		3,563,753
Massachusetts HFA, Refunding RB:
Housing Development, Series B (NPFGC), 5.40%, 12/01/28		1,835		1,836,358
Rental Housing, Series A, AMT (AGM), 5.15%, 7/01/26		12,640		12,813,926
Series C, AMT, 5.35%, 12/01/42		3,100		3,269,725
Massachusetts Port Authority, Refunding RB, BOSFUEL Project, AMT (NPFGC), 5.00%, 7/01/38		8,275		8,364,535
				37,945,135
Michigan — 8.4%
City of Detroit Michigan, RB, Series B (AGM):
Second Lien, 6.25%, 7/01/36		1,075		1,233,057
Second Lien, 7.00%, 7/01/36		500		597,820
Senior Lien, 7.50%, 7/01/33		1,000		1,253,060
City of Detroit Michigan, Refunding RB:
Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27		1,500		1,818,585
Senior Lien, Series D (AGM), 5.00%, 7/01/23		5,000		5,316,300
Series D (NPFGC), 5.00%, 7/01/33		5,000		5,010,850
Kalamazoo Hospital Finance Authority, RB, Bronson Methodist Hospital (AGM), 5.25%, 5/15/36		410		443,181
Lansing Board of Water & Light Utilities System, RB, Series A, 5.50%, 7/01/41		3,185		3,680,809
Michigan State Building Authority, Refunding RB, Facilities Program:
Series I, 6.25%, 10/15/38		3,125		3,599,344


Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (e)	Par (000)		Value
Colorado — 0.3%
Colorado Health Facilities Authority, Refunding RB, Catholic Healthcare, Series A, 5.50%, 7/01/34	$	2,469	$	2,763,447
Connecticut — 0.6%
Connecticut State Health & Educational Facility Authority, RB, Yale University, Series T-1, 4.70%, 7/01/29		5,010		5,689,556
District of Columbia — 1.9%
District of Columbia, RB, Series A, 5.50%, 12/01/30		2,595		3,167,950
District of Columbia Water & Sewer Authority, RB, Series A, 6.00%, 10/01/35		4,281		5,304,133
Metropolitan Washington Airports Authority, RB, Series B, AMT (AMBAC), 5.00%, 10/01/32		10,000		10,403,500
				18,875,583
Florida — 3.4%
City of Tallahassee Florida Energy System, RB (NPFGC), 5.00%, 10/01/32		3,300		3,517,173
County of Miami Dade Florida, RB, (XLCA), 5.00%, 7/01/31		19,800		21,052,548
Florida State Board of Education, GO, Series D, 5.00%, 6/01/37		3,299		3,640,049
Highlands County Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/36		5,400		5,693,760
				33,903,530
Georgia — 1.1%
Metropolitan Atlanta Rapid Transit Authority, RB, Third Indenture, Series B (AGM), 5.00%, 7/01/37		10,000		10,891,443
Hawaii — 1.1%
Honolulu City & County Board of Water Supply, RB, Series A (FGIC), 5.00%, 7/01/33		9,830		10,816,932
Illinois — 3.5%
City of Chicago Illinois, GO, Refunding, Series A (AGC), 5.25%, 1/01/24		11,000		12,342,000
City of Chicago Illinois, RB:
Motor Fuel Tax, Series A (AGC), 5.00%, 1/01/38		4,000		4,174,080
Sales Tax Revenue, Series A, 5.00%, 1/01/41		2,190		2,382,392
Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/38		10,000		12,112,900
State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34		3,499		3,849,524
				34,860,896


	Value
*Total Investments (Cost - $1,454,246,499) – 157.8%**	$	1,582,740,217
Other Assets Less Liabilities – 1.2%		12,384,000
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable – (23.5)%		(235,896,044	)
VRDP Shares, at Liquidation Value – (35.5)%		(356,400,000	)
Net Assets Applicable to Common Shares – 100.0%	$	1,002,828,173



*	As of April 30, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost as computed for federal income tax purposes were as follows:


Tax Cost	$	1,220,820,176
Gross unrealized appreciation	$	128,534,786
Gross unrealized depreciation	$	(2,381,242	)
Net unrealized appreciation	$	126,153,544


(a)	Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

(b)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(c)	Variable rate security. Rate shown is as of report date.

(d)	When-issued security. Unsettled when-issued transactions were as follows:


Counterparty	Value		Unrealized Appreciation
Morgan Stanley & Co., Inc.	$	6,013,565	$	48,561


(e)	Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction.

(f)	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliate	Shares Held at July 31, 2011		Net Activity		Shares Held at April 30, 2012		Income

FFI Institutional Tax-Exempt Fund		4,703,282		21,748,749		26,452,031	$	3,016


(g)	Represents the current yield as of report date.

•	Financial futures contracts sold as of April 30, 2012 were as follows:


Contracts	Issue	Exchange	Expiration	Notional Value		Unrealized Depreciation
560	10-Year US Treasury Note	Chicago Board of Trade	June 2012	$	74,077,500	$	(889,111	)



BLACKROCK MUNIYIELD QUALITY FUND III, INC.	APRIL 30, 2012	1



BLACKROCK MUNIYIELD QUALITY FUND III, INC.	APRIL 30, 2012	2



BLACKROCK MUNIYIELD QUALITY FUND III, INC.	APRIL 30, 2012	3



BLACKROCK MUNIYIELD QUALITY FUND III, INC.	APRIL 30, 2012	4


AGC	Assured Guaranty Corp.
AGM	Assured Guaranty Municipal Corp.
AMBAC	American Municipal Bond Assurance Corp.
AMT	Alternative Minimum Tax (subject to)
ARB	Airport Revenue Bonds
BHAC	Berkshire Hathaway Assurance Corp.
CAB	Capital Appreciation Bonds
COP	Certificates of Participation
EDA	Economic Development Authority
ERB	Education Revenue Bonds
FGIC	Financial Guaranty Insurance Co.
GAB	Grant Anticipation Bonds
Ginnie Mae	Government National Mortgage Association
GO	General Obligation Bonds
HDA	Housing Development Authority
HFA	Housing Finance Agency
HRB	Housing Revenue Bonds
ISD	Independent School District
MRB	Mortgage Revenue Bonds
NPFGC	National Public Finance Guarantee Corp.
PSF-GTD	Permanent School Fund Guaranteed
RB	Revenue Bonds
S/F	Single-Family
Syncora	Syncora Guarantee
XLCA	XL Capital Assurance, Inc.


	Fair Value Measurements - Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

	•	Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities

	•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

	•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its semi-annual report.



Schedule of Investments (concluded)	BlackRock MuniYield Quality Fund III, Inc. (MYI)


Valuation Inputs	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments¹		—		$1,556,288,186		—	$	1,556,288,186
Short-Term Securities	$	26,452,031		—		—		26,452,031
Total	$	26,452,031	$	1,556,288,186		—	$	1,582,740,217


¹	See above Schedule of Investments for values in each state or political subdivision.


²	Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.