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SIGNATURE STEVE FORD
TITLE MANAGER FUND ADMIN
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INDEPENDENT AUDITORS' REPORT
The Board of Directors
BlackRock Fund Investors III
In planning and performing our audit of the financial
statements of BlackRock Fund Investors III (the "Fund") for the
year ended December 31, 1997 (on which we have issued our
report dated February 23, 1998), we considered its internal
control, including control activities for safeguarding
securities, in order to determine our auditing procedures for
the purpose of expressing our opinion on, the financial
statements and to comply with the requirements of Form N-SAR,
and not to provide assurance on the Fund's internal control.
The management of the Fund is responsible for establishing and
maintaining internal control, In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to
the risk that it may be become inadequate because of changes in
conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the Fund's internal control would not
necessarily disclose all matters in internal control that might
be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of one
or more of the internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts
that would be material in relation to the financial statements
being audited may occur and not be detected within a timely
period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the
Fund's internal control and its operation, including controls
for safeguarding securities, that we consider to be material
weaknesses as defined above as of December 31, 1997.
This report is intended solely for the information and use of
management. the Board of Directors of BlackRock Fund Investors
III, and the Securities and Exchange Commission.
DELOITTE & TOUCHE LLP
New York, New York
February 23, 1998
