BlackRock Funds III (Form: 485BPOS, Received: 04/30/2013 14:46:15)

As filed with the Securities and Exchange Commission on April 30, 2013

Registration Nos. 33-54126

811-07332

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-1A


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		x
Pre-Effective Amendment No.		¨
Post-Effective Amendment No. 145		x
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940		x
Amendment No. 149		x

BLACKROCK FUNDS III

(Exact Name of Registrant as Specified in Charter)

400 Howard Street, San Francisco, California 94105

(Address of Principal Executive Offices)

Registrant’s Telephone Number: 1-800-882-0052

John M. Perlowski

BlackRock Funds III

55 East 52nd Street

New York, New York 10055

United States of America

(Name and Address of Agent for Service)

With copies to:

John A. MacKinnon, Esq.

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Benjamin Archibald, Esq.

BlackRock Fund Advisors

55 East 52nd Street

New York, New York 10055

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b)

on (date) pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(1)

on (date) pursuant to paragraph (a)(1) of Rule 485

75 days after filing pursuant to paragraph (a)(2)

on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Beneficial Interest

Master Investment Portfolio has also executed this Registration Statement.

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | Capital Shares

^Ø

BlackRock Cash Funds: Institutional

Capital: BCIXX

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BlackRock Cash Funds: Prime

Capital: BCPXX

^Ø

BlackRock Cash Funds: Treasury

Capital: BCYXX

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Treasury	11

*Details About the Funds*	Details About the Funds’ Investment Strategies	15
	Investment Risks	16

*Account Information*	Shareholder Information	19
	Shareholder Servicing Payments	21
	Calculating the Funds’ Share Price	21
	Fund Distributions	21
	Short-Term Trading Policy	21
	Taxes	22
	Master/Feeder Mutual Fund Structure	22

*Management of the Funds*	Investment Adviser	24
	Administrative Services	24
	Conflicts of Interest	24
	Valuation of Fund Investments	25
	Certain Fund Policies	25

*Financial Highlights*	Financial Performance of the Funds	27

*Glossary*	Glossary of Investment Terms	30



*For More Information*	Funds and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

The investment objective for BlackRock Cash Funds: Institutional (the “Fund”), a series of BlackRock Funds III (the “Trust”), is to seek a high level of income consistent with liquidity and the preservation of capital.

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Capital Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Capital Shares*
Management Fee ¹ ^,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.07%
Administration Fees		0.07%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.17%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.14%

*	Fund currently active, but no assets in share class as of December 31, 2012.

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Money Market Master Portfolio (the “Money Market Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Money Market Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Money Market Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Money Market Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Money Market Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:

This Example is intended to help you compare the cost of investing in Capital Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Capital Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Capital Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years
Capital Shares	$	14	$	52	$	93	$	214

Principal Investment Strategies of the Fund

BlackRock Cash Funds: Institutional seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The Fund’s portfolio will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. Under normal circumstances, the Fund expects to invest at least 95% of its assets in any combination of such investments, which may include certificates of deposit; high-quality debt obligations, such as corporate debt and certain asset-backed securities; certain obligations of U.S. and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

The Fund reserves the right to concentrate its investments ( i.e., invest 25% or more of its total assets in securities of issuers in a particular industry) in the obligations of domestic banks. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”), and other rules of the Securities and Exchange Commission (“SEC”). The Fund will only purchase securities that present minimal credit risk as determined by the Fund’s investment adviser, BFA, pursuant to guidelines approved by the Trust’s Board of Trustees.

The Fund is a “feeder” fund that invests all of its investable assets in Money Market Master Portfolio of MIP, which has the same investment objective and strategies as the Fund. All investments are made at the Money Market Master Portfolio level. This structure is sometimes called a “master/feeder” structure. The Fund’s investment results will correspond directly to the investment results of Money Market Master Portfolio. For simplicity, the prospectus uses the name of the Fund or the term “Fund” (as applicable) to include Money Market Master Portfolio.

Principal Risks of Investing in the Fund

Risk is inherent in all investing. The value of your investment in BlackRock Cash Funds: Institutional, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The following is a summary description of principal risks of investing in the Fund.

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e., interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Credit Risk — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Foreign Exposure Risk — Securities issued or supported by foreign entities, including foreign banks and corporations, may involve additional risks and considerations. Extensive public information about the foreign issuer may not be available, and unfavorable political, economic or governmental developments in the foreign country involved could affect the payment of principal and interest.

Income Risk — Income risk is the risk that the Fund’s yield will vary as short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

Interest Rate Risk — Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter term securities.

Additionally, securities issued or guaranteed by the U.S. government, its agencies, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, due to fluctuations in interest rates, the market value of such securities may vary during the period shareholders own shares of the Fund.

Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.

Mortgage- and Asset-Backed Securities Risks — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.

Regulatory Risk — In 2010, the SEC adopted amendments to money market fund regulations, which imposed new liquidity, credit quality, and maturity requirements on all money market funds. In addition, the SEC may adopt additional reforms to money market fund regulation. These or any other legal or regulatory changes may affect the Fund’s operations and/or return potential.

Repurchase Agreements Risk — If the other party to a repurchase agreement defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value of the security declines, the Fund may lose money.

U.S. Government Obligations Risk — Certain securities in which the Fund may invest, including securities issued by certain U.S. government agencies and U.S. government sponsored enterprises, are not guaranteed by the U.S. government or supported by the full faith and credit of the United States.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

Since no Capital Shares of BlackRock Cash Funds: Institutional were outstanding during the period December 2, 2010 through December 31, 2010 and during the fiscal years ended December 31, 2011 and December 31, 2012, performance for the Fund’s Capital Shares for 2010, 2011 and 2012 is based on the returns of the Fund’s Institutional Shares, which are offered by a separate prospectus, adjusted to reflect the different administration fees borne by the Fund’s Capital Shares.

The bar chart and table in this section provide some indication of the risks of investing in Capital Shares of BlackRock Cash Funds: Institutional. The bar chart shows the returns of Capital Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Capital Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Capital Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the bar chart, the highest return for a quarter was 0.21% (quarter ended March 31, 2009) and the lowest return for a quarter was 0.03% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.04%.


As of 12/31/12 Average Annual Total Returns	1 Year			Since Inception (February 28, 2008)
BlackRock Cash Funds: Institutional — Capital Shares		0.20	%		0.64	%
MFR First Tier Institutional Average		0.07	%		0.56	% ¹

¹	The MFR First Tier Institutional Average is calculated from February 1, 2008.

The Fund’s 7-day yield, also called the current yield, annualizes the amount of income the Fund generates over a 7-day period by projecting the amount for an entire year. To obtain the Fund’s current 7-day yield, call 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day or visit www.blackrock.com/cash.

Because the current yields on high-quality, short-term money market instruments in which the Fund invests are generally lower than yields on such instruments during the periods shown in the foregoing bar chart and table, the current performance of the Fund is generally lower than that shown in the bar chart and table.

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Capital Shares of BlackRock Cash Funds: Institutional is $25 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by State Street Bank and Trust Company, the Fund’s transfer agent, or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Dividends and distributions of BlackRock Cash Funds: Institutional may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement plan, in which case you may be subject to U.S. federal income tax upon withdrawal from such tax deferred arrangements.

Payments to Broker/Dealers and Other Financial Intermediaries

If you purchase shares of BlackRock Cash Funds: Institutional through a broker-dealer or other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

The investment objective for BlackRock Cash Funds: Prime (the “Fund”), a series of BlackRock Funds III (the “Trust”), is to seek a high level of income consistent with liquidity and the preservation of capital.

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Capital Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Capital Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.07%
Administration Fees		0.07%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.17%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.14%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which it invests. Management fees are paid by Prime Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:



	1 Year		3 Years		5 Years		10 Years
Capital Shares	$	14	$	52	$	93	$	214

Principal Investment Strategies of the Fund

BlackRock Cash Funds: Prime seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The Fund’s portfolio will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. Under normal circumstances, the Fund expects to invest at least 95% of its assets in any combination of such investments, which may include certificates of deposit; high-quality debt obligations, such as corporate debt and certain asset-backed securities; certain obligations of U.S. and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

The Fund is a “feeder” fund that invests all of its investable assets in Prime Master Portfolio of MIP, which has the same investment objective and strategies as the Fund. All investments are made at the Prime Master Portfolio level. This structure is sometimes called a “master/feeder” structure. The Fund’s investment results will correspond directly to the investment results of Prime Master Portfolio. For simplicity, the prospectus uses the name of the Fund or the term “Fund” (as applicable) to include Prime Master Portfolio.

Principal Risks of Investing in the Fund

Risk is inherent in all investing. The value of your investment in BlackRock Cash Funds: Prime, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The following is a summary description of principal risks of investing in the Fund.

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Capital Shares of BlackRock Cash Funds: Prime. The bar chart shows the returns of Capital Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Capital Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

Capital Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the bar chart, the highest return for a quarter was 0.14% (quarter ended March 31, 2009) and the lowest return for a quarter was 0.03% (quarter ended December 31, 2011). The year-to-date return as of March 31, 2013 was 0.03%.


As of 12/31/12 Average Annual Total Returns	1 Year		Since Inception (February 28, 2008)
BlackRock Cash Funds: Prime — Capital Shares		0.18%		0.60	%
MFR First Tier Institutional Average		0.07%		0.56	% ¹

¹	The MFR First Tier Institutional Average is calculated from February 1, 2008.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Capital Shares of BlackRock Cash Funds: Prime is $25 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Dividends and distributions of BlackRock Cash Funds: Prime may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement plan, in which case you may be subject to U.S. federal income tax upon withdrawal from such tax deferred arrangements.

Payments to Broker/Dealers and Other Financial Intermediaries

If you purchase shares of BlackRock Cash Funds: Prime through a broker-dealer or other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

The investment objective for BlackRock Cash Funds: Treasury (the “Fund”), a series of BlackRock Funds III (the “Trust”), is to seek a high level of current income consistent with the preservation of capital and liquidity.

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Capital Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Capital Shares
Management Fee ¹ ^,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.07%
Administration Fees		0.07%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.17%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.14%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Treasury Money Market Master Portfolio (the “Treasury Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Treasury Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Capital Shares	$	14	$	52	$	93	$	214

Principal Investment Strategies of the Fund

BlackRock Cash Funds: Treasury seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The Fund’s portfolio will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. Under normal circumstances, at least 80% of the Fund’s assets will be invested in U.S. Treasury obligations, in repurchase agreements with regard to U.S. Treasury obligations and in other money market funds that have substantially the same investment objective and strategies as the Fund. It is further intended that under normal circumstances, 100% of the Fund’s investments will be invested in such securities.

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

The Fund is a “feeder” fund that invests all of its investable assets in Treasury Master Portfolio of MIP, which has the same investment objective and strategies as the Fund. All investments are made at the Treasury Master Portfolio level. This structure is sometimes called a “master/feeder” structure. The Fund’s investment results will correspond directly to the investment results of Treasury Master Portfolio. For simplicity, the prospectus uses the name of the Fund or the term “Fund” (as applicable) to include Treasury Master Portfolio.

Principal Risks of Investing in the Fund

Risk is inherent in all investing. The value of your investment in BlackRock Cash Funds: Treasury, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The following is a summary description of principal risks of investing in the Fund.

Investment in Other Investment Companies Risk — As with other investments, investments in other investment companies are subject to market and selection risk. In addition, if the Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies. To the extent the Fund is held by an affiliated fund, the ability of the Fund itself to hold other investment companies may be limited.

The Fund minimizes these risks to the extent that it invests in U.S. Treasury obligations backed by the full faith and credit of the U.S. government or repurchase agreements with respect to U.S. Treasury obligations.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Capital Shares of BlackRock Cash Funds: Treasury. The bar chart shows the returns of Capital Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Capital Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

Capital Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the bar chart, the highest return for a quarter was 0.03% (quarter ended December 31, 2011) and the lowest return for a quarter was 0.00% (quarter ended June 30, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year		Since Inception (February 28, 2008)
BlackRock Cash Funds: Treasury — Capital Shares		0.02%		0.27	%
MFR Treasury and Repo Institutional Average		0.01%		0.25	% ¹

¹	The MFR Treasury and Repo Institutional Average is calculated from February 1, 2008.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Capital Shares of BlackRock Cash Funds: Treasury is $25 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Dividends and distributions of BlackRock Cash Funds: Treasury may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement plan, in which case you may be subject to U.S. federal income tax upon withdrawal from such tax deferred arrangements.

Payments to Broker/Dealers and Other Financial Intermediaries

If you purchase shares of BlackRock Cash Funds: Treasury through a broker-dealer or other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

Details About the Funds

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime and BlackRock Cash Funds: Treasury (each a “Fund” and collectively the “Funds”), each a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Funds’ Investment Strategies

Each Fund is a “feeder” fund that invests all of its assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. BlackRock Cash Funds: Institutional invests all of its assets in Money Market Master Portfolio. BlackRock Cash Funds: Prime invests all of its assets in Prime Money Market Master Portfolio. BlackRock Cash Funds: Treasury invests all of its assets in Treasury Money Market Master Portfolio. All discussion of the investment objective, strategies and risks of a particular Fund refers also to the investment objective, strategies and risks of its Master Portfolio, unless otherwise indicated. A description of the relationship of the Funds to their respective Master Portfolios appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

Each Fund will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. For a discussion of dollar-weighted average maturity and dollar-weighted average life, please see the Glossary on page 30.

Pursuant to Rule 2a-7, each Fund is subject to a “general liquidity requirement” that requires that each Fund hold securities that are sufficiently liquid to meet reasonably foreseeable shareholder redemptions in light of its obligations under Section 22(e) of the 1940 Act regarding share redemptions and any commitments the Fund has made to shareholders. To comply with this general liquidity requirement, BFA must consider factors that could affect the Fund’s liquidity needs, including characteristics of the Fund’s investors and their likely redemptions. Depending upon the volatility of its cash flows (particularly shareholder redemptions), this may require a Fund to maintain greater liquidity than would be required by the daily and weekly minimum liquidity requirements discussed below.

Each Fund will not acquire any illiquid security ( i.e ., securities that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the value ascribed to them by the Fund) if, immediately following such purchase, more than 5% of the Fund’s total assets are invested in illiquid securities. Each Fund will not acquire any security other than a daily liquid asset unless, immediately following such purchase, at least 10% of its total assets would be invested in daily liquid assets, and no Fund will acquire any security other than a weekly liquid asset unless, immediately following such purchase, at least 30% of its total assets would be invested in weekly liquid assets. For a discussion of daily liquid assets and weekly liquid assets, please see the Glossary on page 30.

Each Fund is ordinarily limited to investing so that immediately following any such acquisition not more than 5% of its total assets will be invested in any one issuer’s securities (other than U.S. government obligations, repurchase agreements collateralized by such securities and securities subject to certain guarantees or otherwise providing a right to demand payment) or, in the event that such securities are not First Tier Securities (as defined in Rule 2a-7), not more than ¹ / ₂ of 1% of the Fund’s total assets. In addition, Rule 2a-7 requires that not more than 3% of each Fund’s total assets be invested in Second Tier Securities (as defined in Rule 2a-7) and that Second Tier Securities may only be purchased if they have a remaining maturity of 45 days or less at the time of acquisition.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital. BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, each Fund expects to invest at least 95% of its assets in any combination of such investments, which may include certificates of deposit; high-quality debt obligations, such as corporate debt and certain asset-backed securities; certain obligations of U.S. and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

Each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime reserves the right to invest 25% or more of its total assets in the obligations of domestic banks. The principal and interest of all securities held by the Funds are payable in U.S. dollars.

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity. BlackRock Cash Funds: Treasury seeks to achieve its investment objective by investing only in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in U.S. Treasury obligations, in repurchase agreements with regard to U.S. Treasury obligations and in other money market funds that have substantially the same investment objective and strategies as the Fund. The Fund currently has an operating policy to invest 100% of its net assets in such securities. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Investment Risks

Risk is inherent in all investing. The value of your investment in the Funds, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Funds or your investment may not perform as well as other similar investments. An investment in the Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although each Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. The following is a description of principal risks of investing in the Funds.

Principal Risks of Investing in the Funds

Concentration Risk (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime) — Each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime may concentrate its investments in the U.S. banking industry, which means that its performance will be closely tied to the performance of a particular market segment. Each Fund’s concentration in these companies may present more risks than if it was broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on a Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

Credit Risk — Credit risk refers to the possibility that the issuer of a security will not be able to make principal and interest payments when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of a Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

Extension Risk (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime) — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value.

Foreign Exposure Risk (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime) — Securities issued or supported by foreign entities, including foreign banks and corporations, may involve additional risks and considerations. Extensive public information about the foreign issuer may not be available, and unfavorable political, economic or governmental developments in the foreign country involved could affect the payment of principal and interest.

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

Investment in Other Investment Companies Risk (BlackRock Cash Funds: Treasury) — As with other investments, investments in other investment companies are subject to market and selection risk. In addition, if the Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies. To the extent the Fund is held by an affiliated fund, the ability of the Fund itself to hold other investment companies may be limited.

Market Risk and Selection Risk — Market risk is the risk that one or more markets in which a Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.

Mortgage- and Asset-Backed Securities Risks (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime) — Mortgage-backed securities (residential and commercial) and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Although asset-backed and commercial mortgage-backed securities (“CMBS”) generally experience less prepayment than residential mortgage-backed securities, mortgage-backed and asset-backed securities, like traditional fixed-income securities, are subject to credit, interest rate, prepayment and extension risks.

Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. The Fund’s investments in asset-backed securities are subject to risks similar to those associated with mortgage-related securities, as well as additional risks associated with the nature of the assets and the servicing of those assets. These securities also are subject to the risk of default on the underlying mortgages or assets, particularly during periods of economic downturn. Certain CMBS are issued in several classes with different levels of yield and credit protection. The Fund’s investments in CMBS with several classes may be in the lower classes that have greater risks than the higher classes, including greater interest rate, credit and prepayment risks.

Mortgage-backed securities may be either pass-through securities or collateralized mortgage obligations (“CMOs”). Pass-through securities represent a right to receive principal and interest payments collected on a pool of mortgages, which are passed through to security holders. CMOs are created by dividing the principal and interest payments collected on a pool of mortgages into several revenue streams (“tranches”) with different priority rights to portions of the underlying mortgage payments. Certain CMO tranches may represent a right to receive interest only (“IOs”), principal only (“POs”) or an amount that remains after other floating-rate tranches are paid (an “inverse floater”). These securities are frequently referred to as “mortgage derivatives” and may be extremely sensitive to changes in interest rates. Interest rates on inverse floaters, for example, vary inversely with a short-term floating rate (which may be reset periodically). Interest rates on inverse floaters will decrease when short-term rates increase, and will increase when short-term rates decrease. These securities have the effect of providing a degree of investment leverage. In response to changes in market interest rates or other market conditions, the value of an inverse floater may increase or decrease at a multiple of the increase or decrease in the value of the underlying securities. If the Fund invests in CMO tranches (including CMO tranches issued by government agencies) and interest rates move in a manner not anticipated by Fund management, it is possible that the Fund could lose all or substantially all of its investment.

The mortgage market in the United States at times has experienced difficulties that may adversely affect the performance and market value of certain of the Fund’s mortgage-related investments. Delinquencies and losses on mortgage loans (including subprime and second-lien mortgage loans) generally have increased and may continue to increase, and a decline in or flattening of real-estate values (as has been experienced and may continue to be experienced in many housing markets) may exacerbate such delinquencies and losses. Also, a number of mortgage loan originators have recently experienced serious financial difficulties or bankruptcy. Reduced investor demand for mortgage loans and mortgage-related securities and increased investor yield requirements have caused limited liquidity in the secondary market for mortgage-related securities, which can adversely affect the market value of mortgage-related securities. It is possible that such limited liquidity in such secondary markets could continue or worsen.

Asset-backed securities entail certain risks not presented by mortgage-backed securities, including the risk that in certain states it may be difficult to perfect the liens securing the collateral backing certain asset-backed securities. In addition, certain asset backed securities are based on loans that are unsecured, which means that there is no collateral to seize if the underlying borrower defaults. Certain mortgage-backed securities in which the Fund may invest may also provide a degree of investment leverage, which could cause the Fund to lose all or substantially all of its investment.

Prepayment Risk (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime) — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. In periods of falling interest rates, the rate of prepayments tends to increase (as does price fluctuation) as borrowers are motivated to pay off debt and refinance at new lower rates. During such periods, reinvestment of the prepayment proceeds by the management team will generally be at lower rates of return than the return on the assets that were prepaid. Prepayment reduces the yield to maturity and the average life of the security.

Repurchase Agreements Risk — If the other party to a repurchase agreement defaults on its obligation under the agreement, a Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value of the security declines, the Fund may lose money.

U.S. Government Obligations Risk — Obligations of U.S. government agencies, authorities, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, not all U.S. government securities are backed by the full faith and credit of the United States. Obligations of certain agencies, authorities, instrumentalities and sponsored enterprises of the U.S. government are backed by the full faith and credit of the United States ( e.g., the Government National Mortgage Association); other obligations are backed by the right of the issuer to borrow from the U.S. Treasury ( e.g., the Federal Home Loan Banks) and others are supported by the discretionary authority of the U.S. government to purchase an agency’s obligations. Still others are backed only by the credit of the agency, authority, instrumentality or sponsored enterprise issuing the obligation. No assurance can be given that the U.S. government would provide financial support to any of these entities if it is not obligated to do so by law.

BlackRock Cash Funds: Treasury minimizes these risks to the extent that it invests in U.S. Treasury obligations backed by the full faith and credit of the U.S. government or repurchase agreements with respect to U.S. Treasury obligations.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

When-Issued and Delayed Settlement Transactions Risk — When-issued and delayed settlement securities involve the risk that the security a Fund buys will lose value prior to its delivery. There is also the risk that the security will not be issued or that the other party to the transaction will not meet is obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Expense Risk — Fund expenses are subject to a variety of factors, including fluctuations in a Fund’s net assets. Accordingly, actual expenses may be greater or less than those indicated. For example, to the extent that a Fund’s net assets decrease due to market declines or redemptions, a Fund’s expenses will increase as a percentage of Fund net assets. During periods of high market volatility, these increases in a Fund’s expense ratio could be significant.

Liquidity Risk — Liquidity risk refers to the possibility that it may be difficult or impossible to sell certain positions at an acceptable price. A Fund may be unable to pay redemption proceeds within the time period stated in this prospectus because of unusual market conditions, an unusually high volume of redemption requests, or other reasons.

For a description of the Funds’ policies and procedures with respect to disclosure of the Master Portfolios’ portfolio holdings, and a discussion of the Funds’ investments and risks, please refer to the Funds’ combined Statement of Additional Information (“SAI”).

Account Infor mation

Shareholder Inform ation

Who is Eligible to Invest?

The minimum initial investment amount for Capital Shares of each Fund is $25 million; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your shareholder servicing agent (“Shareholder Servicing Agent”) or the Transfer Agent for more information.

The Funds offer additional share classes with different expenses and expected returns, including share classes you may be eligible to purchase. Call 1-888-204-3956 (toll-free) for additional information.

In order to invest, a completed account application form must be submitted to, and processed by, your Shareholder Servicing Agent or the Transfer Agent and an account number assigned. You may be asked to provide information to verify your identity when opening an account.

Your Shareholder Servicing Agent may charge you a fee and may offer additional account services. Additionally, your Shareholder Servicing Agent may have procedures for placing orders for Capital Shares that differ from those of the Funds, such as different investment minimums or earlier trading deadlines. Please contact your Shareholder Servicing Agent directly for more information and details.

How to Buy Shares

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities (i.e., the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ⁽¹⁾ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

Purchases generally must be made in U.S. dollars and funds must be received via the Fedwire Funds Service by its close, or by such other means as the Funds may from time to time determine. You may be charged for any costs incurred in connection with a purchase order that has been placed but for which the Fund has not received full payment.

How to Sell Shares

You may sell Fund shares without paying a sales charge. Your order to sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, by such closing time) to sell shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

⁽¹⁾	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

regulation, deemed that (a) trading shall be restricted or (b) an emergency exists; (5) for any period that the SEC may by order permit for your protection; or (6) for any period during which a Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal securities laws as discussed below in this section. Each Fund reserves the right to redeem your shares automatically and close your account for any reason, subject to applicable law, and send you the proceeds, which would reflect the NAV on the day the Fund automatically redeems your shares. For example, a Fund may redeem your shares automatically to reimburse the Fund for any losses sustained by reason of your failure to make full payment for shares purchased or to collect any charge relating to a transaction effected for your benefit that is applicable to the Fund’s shares, as provided from time to time in this prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

If the Trust’s Board of Trustees, including a majority of the non-interested trustees, determines that the deviation between a Fund’s amortized cost price per share and the market-based net asset value per share may result in material dilution or other unfair results, the Board of Trustees, subject to certain conditions, may in the case of a Fund that the Board of Trustees has determined to liquidate irrevocably, suspend redemptions and payment of redemption proceeds in order to facilitate the permanent liquidation of the Fund in an orderly manner. If this were to occur, it would likely result in a delay in your receipt of your redemption proceeds.

Special Instructions for Direct Buyers

A direct buyer who has established an account with a Fund can add to or redeem from that account by phone or through the mail.

To add or redeem shares by phone, call 1-888-204-3956 between 8:30 a.m. and 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time). The Transfer Agent will employ procedures designed to confirm that your order is valid. These may include asking for identifying information and recording the phone call. Neither the Transfer Agent nor the Funds may be held liable for acting on telephone instructions that the Transfer Agent reasonably believes to be valid. For redemptions, the Transfer Agent will wire proceeds directly to your designated bank account. ⁽¹⁾

To invest by mail, make your check payable to the Fund of your choice and mail it to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206. Please include the Fund’s Share Class number and your account number on your check. You will find the numbers on your monthly statements.

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Numbers:

1121 (BlackRock Cash Funds: Institutional — Capital Shares)

1991 (BlackRock Cash Funds: Prime — Capital Shares)

1101 (BlackRock Cash Funds: Treasury — Capital Shares)

To redeem shares by mail, indicate the dollar amount you wish to receive or the number of shares you wish to sell in your order to sell. Include your Fund’s Share Class number and your account and taxpayer identification numbers. All account signatories must sign the order.

A direct buyer can ask the Transfer Agent to wire proceeds directly to its designated bank account. ⁽²⁾

When a direct buyer purchases Fund shares and then quickly sells ( e.g., sells before clearance of the purchase check), the Fund may delay the payment of proceeds for up to ten days to ensure that purchase checks have cleared.

⁽¹⁾

The following procedures are intended to help prevent fraud. If you wish to make a change to your list of authorized traders, you must provide a written request signed by an authorized signer on your account. If you wish to change your bank wire instructions or list of authorized signers, you must make your request in writing and include a medallion signature guarantee or provide a corporate resolution of a recent date or other documentation as determined by the Transfer Agent. You can obtain a medallion signature guarantee from most banks and securities dealers. A medallion signature guarantee is not a notarized signature.

⁽²⁾

To help prevent fraud, if you direct the sale proceeds to someone other than your account’s owner of record, to an address other than your account’s address of record or to a bank not designated previously, you must make your request in writing and include a medallion signature guarantee or provide a corporate resolution of a recent date or other documentation as determined by the Transfer Agent. You can obtain a medallion signature guarantee from most banks and securities dealers. A medallion signature guarantee is not a notarized signature.

Shareholder Servicing Payments

The Funds have adopted a shareholder servicing plan (the “Plan”) that allows each Fund to pay shareholder servicing fees for certain services provided to its shareholders.

The shareholder servicing fees payable pursuant to the Plan are paid to compensate brokers, dealers, financial institutions and industry professionals (such as BlackRock, Inc. (“BlackRock”), The PNC Financial Services Group, Inc. (“PNC”), Barclays Bank PLC and their respective affiliates) (each, a “Financial Intermediary”) for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of a Fund’s shares. Because the fees paid by a Fund under the Plan are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment in the Funds and may cost you more than paying other types of sales charges.

In addition to, rather than in lieu of, shareholder servicing fees that a Fund may pay to a Financial Intermediary pursuant to the Plan and fees a Fund pays to the Transfer Agent, BFA, on behalf of a Fund, may enter into non-Plan agreements with a Financial Intermediary pursuant to which the Fund will pay a Financial Intermediary for administrative, networking, recordkeeping, sub-transfer agency and shareholder services. These non-Plan payments are generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a Financial Intermediary or (2) a fixed dollar amount for each account serviced by a Financial Intermediary. The aggregate amount of these payments may be substantial.

From time to time, BFA or its affiliates also may pay a portion of the fees for administrative, networking, recordkeeping, sub-transfer agency and shareholder services described above at its or their own expense and out of its or their legitimate profits. BFA or its affiliates may compensate affiliated and unaffiliated Financial Intermediaries for these other services to the Funds and shareholders. These payments would be in addition to the Fund payments described in this prospectus and may be a fixed dollar amount, may be based on the number of customer accounts maintained by the Financial Intermediary, or may be based on a percentage of the value of shares sold to, or held by, customers of the Financial Intermediary. The aggregate amount of these payments by BFA, and its affiliates may be substantial. Payments by BFA may include amounts that are sometimes referred to as “revenue sharing” payments. In some circumstances, these revenue sharing payments may create an incentive for a Financial Intermediary, its employees or associated persons to recommend or sell shares of a Fund to you. Please contact your Financial Intermediary for details about payments it may receive from a Fund or from BFA or its affiliates. For more information, see the Funds’ SAI.

Calculating the Funds’ Share Price

Each Fund’s share price (also known as a Fund’s NAV) is calculated by dividing the value of the net assets of the Fund (i.e., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

Each Fund’s NAV is calculated at 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time). The NAV of each Fund is calculated based on the net asset value of the Master Portfolio in which the Fund invests. The Funds’ SAI includes a description of the methods for valuing the Master Portfolios’ investments.

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributi ons

Each Fund declares distributions of its net investment income daily and distributes them monthly to shareholders. A Fund distributes its net realized capital gains, if any, to shareholders at least annually. Distributions payable to you by a Fund will be automatically reinvested in additional shares of that Fund unless you have elected to receive distribution payments in cash.

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Each Fund credits distributions earned on weekends and holidays to the preceding Business Day. If you sell shares before the monthly distribution payment date, each Fund remits any distributions declared but not yet paid on the next distribution payment date. If you sell all shares before the monthly distribution payment date, each Fund remits all distributions accrued with the sale proceeds.

Short-Ter m Trading Policy

Trust and MIP have evaluated the risks of market timing activities by the Funds’ shareholders and have determined that due to (i) each Fund’s policy of seeking to maintain the Fund’s NAV per share at $1.00 each day, (ii) the nature of each Fund’s portfolio holdings and (iii) the nature of each Fund’s shareholders, it is unlikely that (a) market timing would be attempted by a Fund’s shareholders or (b) any attempts to market time a Fund by shareholders would result in a negative impact to the Fund or its shareholders. As a result, the Boards of Trustees of the Trust and MIP have not adopted policies and procedures to deter short-term trading in the Funds. There can be no assurances, however, that the Funds may not, on occasion, serve as a temporary or short-term investment vehicle for those who seek to market time funds offered by other investment companies.

T axes

The following discussion regarding U.S. federal income taxes is based upon laws in effect as of the date of this prospectus and summarizes only some of the important U.S. federal income tax considerations affecting the Funds and their U.S. shareholders. This discussion is not intended as a substitute for careful tax planning. Please see the Funds’ SAI for additional U.S. federal income tax information.

Distributions from your Fund’s net investment income and net realized capital gains are taxable, whether you choose to receive them in cash or automatically reinvest them in additional Fund shares. The amount of taxes you owe will vary depending on your tax status and based on the amount and character of the Fund’s distributions to you and your tax rate.

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ⁽¹⁾
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ⁽²⁾

⁽¹⁾

Distributions from the Funds paid to corporate shareholders will not qualify for the dividends-received deduction generally available to corporate taxpayers. Since each Fund’s income is derived from sources that do not pay “qualified dividend income,” income distributions from the net investment income of each Fund generally will not qualify for taxation at the maximum 20% U.S. federal income tax rate available to individuals on qualified dividend income.

⁽²⁾	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

Provided the Funds are able to maintain a constant NAV per share of $1.00, sales of the Funds’ shares generally will not result in taxable gain or loss. After the end of each year, the Funds will send to you a notice that tells you how much you have received in distributions during the year and their U.S. federal income tax status. You could also be subject to foreign, state and local taxes on such distributions.

In certain circumstances, you may be subject to back-up withholding taxes on distributions to you from the Funds if you fail to provide the Funds with your correct social security number or other taxpayer identification number, or to make required certifications, or if you have been notified by the U.S. Internal Revenue Service (“IRS”) that you are subject to back-up withholding.

A 3.8% Medicare contribution tax will be imposed on the net investment income (which includes, but is not limited to, interest, dividends and net gains from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married and filing jointly, and of trusts and estates, for taxable years beginning after December 31, 2012.

A 30% withholding tax on dividends paid after December 31, 2013 and redemption proceeds paid after December 31, 2016 will be imposed on (i) certain foreign financial institutions and investment funds, unless they agree to collect and disclose to the IRS information regarding their direct and indirect U.S. account holders and (ii) certain other foreign entities unless they certify certain information regarding their direct and indirect U.S. owners. Under some circumstances, a foreign shareholder may be eligible for refunds or credits of such taxes.

Tax considerations for tax-exempt or foreign investors or those holding Fund shares through a tax-deferred account, such as a 401(k) plan or Individual Retirement Account, will be different. For example, shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Internal Revenue Code generally are not subject to U.S. federal income tax on Fund dividends or distributions or on sales of Fund shares. Because each investor’s tax circumstances are unique and because tax laws are subject to change, you should consult your tax adviser about your investment.

Master/F eeder Mutual Fund Structure

Fund. BFA serves as investment adviser to each Master Portfolio. The Master Portfolios may accept investments from other feeder funds. Certain actions involving other feeder funds, such as a substantial withdrawal, could affect the Master Portfolios and, therefore, the Funds.

Feeder Fund Expenses

Feeder funds, including the Funds, bear their respective master portfolio’s expenses in proportion to the amount of assets each invests in the master portfolio. The feeder fund can set its own transaction minimums, fund-specific expenses and conditions.

Feeder Fund Rights

Under the master/feeder structure, the Trust’s Board of Trustees retains the right to withdraw a Fund’s assets from its Master Portfolio if it believes doing so is in the best interests of the Fund’s shareholders. If the Trust’s Board of Trustees decides to withdraw a Fund’s assets, it would then consider whether the Fund should hire its own investment adviser, invest in another master portfolio or take other action.

Manage ment of the Funds

Investment Advi ser

Each Fund is a “feeder” fund that invests all of its assets in a Master Portfolio that has an investment objective, strategies and policies substantially identical to those of the Fund. BFA, a registered investment adviser, serves as investment adviser to the Master Portfolios. BFA manages the investment of the Master Portfolios’ assets and provides the Master Portfolios with investment guidance and policy direction in connection with daily portfolio management, subject to the supervision of MIP’s Board of Trustees. For its services to the Master Portfolios, BFA is entitled to receive a management fee at the annual rate of 0.10% of the Master Portfolio’s average daily net assets. BFA has contractually agreed to waive 0.03% of its management fee through April 30, 2014. BFA and BAL, the Funds’ administrator, have voluntarily agreed to waive a portion of their respective fees and/or reimburse operating expenses to enable each Fund and Master Portfolio to maintain minimum levels of daily net investment income. BFA and BAL may discontinue this waiver and/or reimbursement at any time without notice.

BFA is located at 400 Howard Street, San Francisco, California 94105. BFA is an indirect wholly-owned subsidiary of BlackRock. As of March 31, 2013, BFA and its affiliates had approximately $3.936 trillion in investment company and other portfolio assets under management.

A discussion regarding the basis for MIP’s Board of Trustees’ approval of the investment advisory agreements with BFA is available in the Funds’ semi-annual report for the period ended June 30, 2012.

Administrative S ervices

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising the shareholder servicing agents on behalf of the Funds.

BAL is entitled to receive fees for these services at the annual rate of 0.07% of the average daily net assets of Capital Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Con flicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)), in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Funds and their shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Funds. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Funds. One or more of the Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests in securities, currencies and other instruments in which the Funds directly and indirectly invest. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Funds. The trading activities of these Affiliates are carried out without reference to positions held

directly or indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

The activities of Affiliates may give rise to other conflicts of interest that could disadvantage the Funds and their shareholders. BFA has adopted policies and procedures designed to address these potential conflicts of interest.

Valuation of Fund Investments

Each Fund’s share price (also known as a Fund’s NAV) is calculated by dividing the value of the net assets of the Fund ( i.e., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

Each Fund’s NAV is calculated at 5:00 p.m. Eastern Time on any Business Day (or, if the Fund closes early, at such closing time). The NAV of each Fund is calculated based on the net asset value of the Master Portfolio in which the Fund invests. The amortized cost method is used in calculating the Master Portfolio’s net asset value, meaning that the calculation is based on a valuation of the assets held by a Master Portfolio at cost, with an adjustment for any discount or premium on a security at the time of purchase. The Funds’ SAI includes more information about the methods for valuing the Master Portfolios’ investments.

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

The Funds are subject to the USA PATRIOT Act (the “Patriot Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, a Fund may request information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of financial professionals; it will be used only for compliance with the requirements of the Patriot Act.

The Funds reserve the right to reject purchase orders from persons who have not submitted information sufficient to allow the Funds to verify their identity. The Funds also reserve the right to redeem any amounts in a Fund from persons whose identity it is unable to verify on a timely basis. It is the Funds’ policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic personal information about its Clients, except as permitted by law, or as is necessary to respond to regulatory requests or to service Client accounts. These nonaffiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of Capital Shares of each Fund since inception. Certain information reflects financial results for a single Capital Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in Capital Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with each Fund’s financial statements, is included in the Funds’ combined annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Capital
	Period January 1, 2010 to December 1, 2010 ¹			Year Ended December 31, 2009			Period February 28, 2008 ² to December 31, 2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00
Net investment income		0.0018			0.0041			0.0200
Dividends from net investment income ³		(0.0018	)		(0.0041	)		(0.0200	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.18	% ⁵		0.41	%		2.14	% ⁵
Ratios to Average Net Assets ⁶
Total expenses		0.17	% ⁷		0.17	%		0.19	% ⁷
Total expenses after fees waived		0.14	% ⁷		0.14	%		0.14	% ⁷
Net investment income		0.18	% ⁷		0.33	%		2.57	% ⁷
Supplemental Data
Net assets, end of period (000)		— ¹		$	277,382		$	101

¹	There were no Capital Shares outstanding from December 2, 2010 through December 31, 2010 and during the fiscal years ended December 31, 2011 and December 31, 2012.

²	Commencement of operations.

³	Dividends are determined in accordance with federal income tax regulations.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Aggregate total investment return.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated gross expenses and/or net investment income.

⁷	Annualized.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	Capital
	Year Ended December 31,												Period February 28, 2008 ¹ to December 31, 2008
	2012			2011			2010			2009			Period February 28, 2008 ¹ to December 31, 2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0018			0.0014			0.0018			0.0030			0.0200
Dividends from net investment income ²		(0.0018	)		(0.0014	)		(0.0018	)		(0.0030	)		(0.0020	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.18	%		0.14	%		0.18	%		0.30	%		2.13	% ⁴
Ratios to Average Net Assets ⁵
Total expenses		0.14	% ⁶		0.14	% ⁶		0.17	%		0.19	%		0.21	% ⁷
Total expenses after fees waived		0.14	% ⁶		0.14	% ⁶		0.14	%		0.16	%		0.15	% ⁷
Net investment income		0.18	% ⁶		0.15	% ⁶		0.17	%		0.27	%		2.23	% ⁷
Supplemental Data
Net assets, end of period (000)	$	1,394,794		$	456,657		$	517,988		$	673,375		$	226,487

¹	Commencement of operations.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the two years ended December 31, 2010 and the period ended December 31, 2008, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Annualized.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	Capital
	Year Ended December 31,												Period February 28, 2008 ¹ to December 31, 2008
	2012			2011			2010			2009			Period February 28, 2008 ¹ to December 31, 2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0002			0.0004			0.0007			0.0008			0.0100
Dividends from net investment income ²		(0.0002	)		(0.0004	)		(0.0007	)		(0.0008	)		(0.0100	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.02	%		0.04	%		0.07	%		0.08	%		1.12	% ⁴
Ratios to Average Net Assets ⁵
Total expenses		0.14	% ⁶		0.14	% ⁷		0.17	%		0.17	%		0.19	% ⁸
Total expenses after fees waived		0.13	% ⁶		0.10	% ⁷		0.12	%		0.08	%		0.05	% ⁸
Net investment income		0.02	% ⁶		0.01	% ⁷		0.06	%		0.07	%		0.37	% ⁸
Supplemental Data
Net assets, end of period (000)	$	273,121		$	18,370		$	139,657		$	32,419		$	44,698

¹	Commencement of operations.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the two years ended December 31, 2010 and the period ended December 31, 2008, which includes gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

⁸	Annualized.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Daily Liquid Assets — include (i) cash; (ii) direct obligations of the U.S. government; and (iii) securities that will mature or are subject to a demand feature that is exercisable and payable within one business day.

Distribution Fees — fees used to support a Fund’s marketing and distribution efforts, such as compensating financial professionals and other financial intermediaries, advertising and promotion.

Dollar-Weighted Average Life — the dollar-weighted average maturity of a Fund’s portfolio calculated without reference to the exceptions used for variable or floating rate securities regarding the use of the interest rate reset dates in lieu of the security’s actual maturity date. “Dollar-weighted” means the larger the dollar value of a debt security in the Fund, the more weight it gets in calculating this average.

Dollar-Weighted Average Maturity — the average maturity of a Fund is the average amount of time until the organizations that issued the debt securities in the Fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of a debt security in the Fund, the more weight it gets in calculating this average. To calculate the dollar-weighted average maturity, the Fund may treat a variable or floating rate security as having a maturity equal to the time remaining to the security’s next interest rate reset date rather than the security’s actual maturity.

Management Fee — a fee paid to BFA for managing a Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

Weekly Liquid Assets — include (i) cash; (ii) direct obligations of the U.S. government; (iii) U.S. government securities issued by a person controlled or supervised by and acting as an instrumentality of the U.S. government pursuant to authority granted by the U.S. Congress, that are issued at a discount to the principal amount to be repaid at maturity and have a remaining maturity of 60 days or less; and (iv) securities that will mature or are subject to a demand feature that is exercisable and payable within five business days.

For More Information

Fund and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

This prospectus contains important information you should know before investing, including information about risks. Read it carefully and keep it for future reference. More information about BlackRock Funds III is available at no charge upon request. This information includes:

Annual/Semi-Annual Reports

These reports contain additional information about each of the Fund’s investments. The annual report describes the Fund’s performance, lists portfolio holdings, and discusses recent market conditions, economic trends and Fund investment strategies that significantly affected the Fund’s performance for the last fiscal year.

Statement of Additional Information

A Statement of Additional Information (“SAI”), dated April 30, 2013, has been filed with the Securities and Exchange Commission (“SEC”). The SAI, which includes additional information about each Fund, may be obtained free of charge, along with each Fund’s annual and semi-annual reports, by calling 1-888-204-3956 on any business day. The SAI, as supplemented from time to time, is incorporated by reference into this prospectus.

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

General fund information and specific fund performance, including SAI and annual/semi-annual reports, can be accessed free of charge at www.blackrock.com/prospectus/cash. Mutual fund prospectuses and literature can also be requested via this website.

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You may also view and copy public information about each Fund, including the SAI, by visiting the EDGAR database on the SEC’s website (http://www.sec.gov) or the SEC’s Public Reference Room in Washington, D.C. Copies of this information can be obtained, for a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing to the Public Reference Room of the SEC, Washington, D.C. 20549. Information about obtaining documents on the SEC’s website without charge can be obtained by calling the SEC directly at (800) SEC-0330.

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-CAP-0413

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | Institutional Shares

^Ø

BlackRock Cash Funds: Institutional

Institutional: BGIXX

^Ø

BlackRock Cash Funds: Prime

Institutional: BPIXX

^Ø

BlackRock Cash Funds: Government

Institutional: BVIXX

^Ø

BlackRock Cash Funds: Treasury

Institutional: BRIXX

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Government	11
	Key Facts About BlackRock Cash Funds: Treasury	15

*Details About the Funds*	Details About the Funds’ Investment Strategies	19
	Investment Risks	20

*Account Information*	Shareholder Information	23
	Shareholder Servicing Payments	25
	Calculating the Funds’ Share Price	25
	Fund Distributions	25
	Short-Term Trading Policy	26
	Taxes	26
	Master/Feeder Mutual Fund Structure	27

*Management of the Funds*	Investment Adviser	28
	Administrative Services	28
	Conflicts of Interest	28
	Valuation of Fund Investments	29
	Certain Fund Policies	29

*Financial Highlights*	Financial Performance of the Funds	31

*Glossary*	Glossary of Investment Terms	35



*For More Information*	Funds and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Institutional Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.05%
Administration Fees		0.05%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.15%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.12%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in Institutional Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Institutional Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Institutional Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years
Institutional Shares	$	12	$	45	$	82	$	189

Principal Investment Strategies of the Fund

The Fund reserves the right to concentrate its investments ( i.e. , invest 25% or more of its total assets in securities of issuers in a particular industry) in the obligations of domestic banks. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Institutional Shares of BlackRock Cash Funds: Institutional by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Institutional Shares of the Fund for each of the last ten calendar years. The average annual total return table compares the average annual total return of Institutional Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Institutional Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the ten-year period shown in the bar chart, the highest return for a quarter was 1.35% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.03% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.04%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			10 Years
BlackRock Cash Funds: Institutional — Institutional Shares		0.22	%		0.77	%		2.00	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.76	%

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Institutional Shares of BlackRock Cash Funds: Institutional is $100 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Institutional Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.05%
Administration Fees		0.05%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.15%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.12%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Prime Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Institutional Shares	$	12	$	45	$	82	$	189

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Institutional Shares of BlackRock Cash Funds: Prime by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Institutional Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Institutional Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

Institutional Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.34% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.03% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.04%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (April 16, 2003)
BlackRock Cash Funds: Prime — Institutional Shares		0.20	%		0.74	%		2.00	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.78	% ¹

¹	The MFR First Tier Institutional Average is calculated from April 1, 2003.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Institutional Shares of BlackRock Cash Funds: Prime is $100 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Government

Investment Objective

The investment objective for BlackRock Cash Funds: Government (the “Fund”), a series of BlackRock Funds III (the “Trust”), is to seek a high level of current income consistent with the preservation of capital and liquidity.

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of BlackRock Cash Funds: Government.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Institutional Shares*
Management Fee ^1, ²		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.41%
Administration Fees		0.05%
Independent Expenses ³		0.36%
Total Annual Class Operating Expenses		0.51%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.39)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.12%

*	Fund currently active, but no assets in share class as of December 31, 2012.

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Government Money Market Master Portfolio (the “Government Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Government Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Government Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Government Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Government Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Institutional Shares	$	12	$	124	$	246	$	603

Principal Investment Strategies of the Fund

BlackRock Cash Funds: Government seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The Fund’s portfolio will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. Under normal circumstances, at least 80% of the Fund’s assets will be invested in certain obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements with regard to such obligations; and other money market funds that have substantially the same investment objective and strategies as the Fund. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”), and other rules of the Securities and Exchange Commission (”SEC”). The Fund will only purchase securities that present minimal credit risk as determined by the Fund’s investment adviser, BFA, pursuant to guidelines approved by the Trust’s Board of Trustees.

The Fund is a “feeder” fund that invests all of its investable assets in Government Master Portfolio of MIP, which has the same investment objective and strategies as the Fund. All investments are made at the Government Master Portfolio level. This structure is sometimes called a “master/feeder” structure. The Fund’s investment results will correspond directly to the investment results of Government Master Portfolio. For simplicity, the prospectus uses the name of the Fund or the term “Fund” (as applicable) to include Government Master Portfolio.

Principal Risks of Investing in the Fund

Risk is inherent in all investing. The value of your investment in BlackRock Cash Funds: Government, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The following is a summary description of principal risks of investing in the Fund.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

Since no Institutional Shares of BlackRock Cash Funds: Government were outstanding during the period April 19, 2011 through December 31, 2011 and during the fiscal year ended December 31, 2012, performance for the Fund’s Institutional Shares for 2011 and 2012 is based on the returns of the Fund’s Select Shares, which are offered by a separate prospectus, adjusted to reflect the different administration fees borne by the Fund’s Institutional Shares.

The bar chart and table in this section provide some indication of the risks of investing in Institutional Shares of BlackRock Cash Funds: Government by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Institutional Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Institutional Shares of the Fund to that of the Money Fund Report (“MFR”) Government Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Government

Institutional Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the bar chart, the highest return for a quarter was 1.33% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.01% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Government — Institutional Shares		0.05	%		0.44	%		1.93	%
MFR Government Institutional Average		0.14	%		0.62	%		1.87	% ¹

¹	The MFR Government Institutional Average is calculated from September 1, 2004.

Investment Adviser

Government Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Institutional Shares of BlackRock Cash Funds: Government is $100 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Dividends and distributions of BlackRock Cash Funds: Government may be subject to U.S. federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement plan, in which case you may be subject to U.S. federal income tax upon withdrawal from such tax deferred arrangements.

Payments to Broker/Dealers and Other Financial Intermediaries

If you purchase shares of BlackRock Cash Funds: Government through a broker-dealer or other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or visit your financial intermediary’s website for more information.

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Institutional Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)	Institutional Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.05%
Administration Fees		0.05%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.15%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.12%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Institutional Shares	$	12	$	45	$	82	$	189

Principal Investment Strategies of the Fund

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Institutional Shares of BlackRock Cash Funds: Treasury by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Institutional Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Institutional Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

Institutional Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.33% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.00% (quarter ended September 30, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Treasury — Institutional Shares		0.02	%		0.37	%		1.86	%
MFR Treasury and Repo Institutional Average		0.01	%		0.30	%		1.65	% ¹

¹	The MFR Treasury and Repo Institutional Average is calculated from September 1, 2004.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as (“BFA”).

Purchase and Sale of Shares

The minimum initial investment for Institutional Shares of BlackRock Cash Funds: Treasury is $100 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Funds

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each a “Fund” and collectively the “Funds”), each a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Funds’ Investment Strategies

Each Fund is a “feeder” fund that invests all of its assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. BlackRock Cash Funds: Institutional invests all of its assets in Money Market Master Portfolio. BlackRock Cash Funds: Prime invests all of its assets in Prime Money Market Master Portfolio. BlackRock Cash Funds: Government invests all of its assets in Government Money Market Master Portfolio. BlackRock Cash Funds: Treasury invests all of its assets in Treasury Money Market Master Portfolio. All discussion of the investment objective, strategies and risks of a particular Fund refers also to the investment objective, strategies and risks of its Master Portfolio, unless otherwise indicated. A description of the relationship of the Funds to their respective Master Portfolios appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

Each Fund will not acquire any illiquid security ( i.e. , securities that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the value ascribed to them by the Fund) if, immediately following such purchase, more than 5% of the Fund’s total assets are invested in illiquid securities. Each Fund will not acquire any security other than a daily liquid asset unless, immediately following such purchase, at least 10% of its total assets would be invested in daily liquid assets, and no Fund will acquire any security other than a weekly liquid asset unless, immediately following such purchase, at least 30% of its total assets would be invested in weekly liquid assets. For a discussion of daily liquid assets and weekly liquid assets, please see the Glossary on page 35.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, each Fund expects to invest at least 95% of its assets in any combination of such investments, which may include certificates of deposit;

high-quality debt obligations, such as corporate debt and certain asset-backed securities; certain obligations of U.S. and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

BlackRock Cash Funds: Government

The investment objective for BlackRock Cash Funds: Government is to seek a high level of current income consistent with the preservation of capital and liquidity.

BlackRock Cash Funds: Government seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in certain obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements with regard to such obligations; and other money market funds that have substantially the same investment objective and strategies as the Fund. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity.

BlackRock Cash Funds: Treasury seeks to achieve its investment objective by investing only in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in U.S. Treasury obligations, in repurchase agreements with regard to U.S. Treasury obligations and in other money market funds that have substantially the same investment objective and strategies as the Fund. The Fund currently has an operating policy to invest 100% of its net assets in such securities. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Investment Risks

Principal Risks of Investing in the Funds

Foreign Exposure Risk (BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime, Principal Risk; BlackRock Cash Funds: Government, Other Risk) — Securities issued or supported by foreign entities, including foreign banks and corporations, may involve additional risks and considerations. Extensive public information about the foreign issuer may not be available, and unfavorable political, economic or governmental developments in the foreign country involved could affect the payment of principal and interest.

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

Investment in Other Investment Companies Risk (BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury) — As with other investments, investments in other investment companies are subject to market and selection risk. In addition, if a Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in a Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies. To the extent a Fund is held by an affiliated fund, the ability of the Fund itself to hold other investment companies may be limited.

in the secondary market for mortgage-related securities, which can adversely affect the market value of mortgage-related securities. It is possible that such limited liquidity in such secondary markets could continue or worsen.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Account Information

Shareholder Information

Who is Eligible to Invest?

The minimum initial investment amount for Institutional Shares of each Fund is $100 million; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your shareholder servicing agent (“Shareholder Servicing Agent”) or the Transfer Agent for more information.

Your Shareholder Servicing Agent may charge you a fee and may offer additional account services. Additionally, your Shareholder Servicing Agent may have procedures for placing orders for Institutional Shares that differ from those of the Funds, such as different investment minimums or earlier trading deadlines. Please contact your Shareholder Servicing Agent directly for more information and details.

How to Buy Shares

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities ( i.e., the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ¹ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

How to Sell Shares

¹	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

by order permit for your protection; or (6) for any period during which a Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal securities laws as discussed below in this section.

Each Fund reserves the right to redeem your shares automatically and close your account for any reason, subject to applicable law, and send you the proceeds, which would reflect the NAV on the day the Fund automatically redeems your shares. For example, a Fund may redeem your shares automatically to reimburse the Fund for any losses sustained by reason of your failure to make full payment for shares purchased or to collect any charge relating to a transaction effected for your benefit that is applicable to the Fund’s shares, as provided from time to time in this prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Special Instructions for Direct Buyers

A direct buyer who has established an account with a Fund can add to or redeem from that account by phone or through the mail.

To add or redeem shares by phone, call 1-888-204-3956 between 8:30 a.m. and 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time). The Transfer Agent will employ procedures designed to confirm that your order is valid. These may include asking for identifying information and recording the phone call. Neither the Transfer Agent nor the Funds may be held liable for acting on telephone instructions that the Transfer Agent reasonably believes to be valid. For redemptions, the Transfer Agent will wire proceeds directly to your designated bank account. ¹

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Numbers:

1127 (BlackRock Cash Funds: Institutional — Institutional Shares)

1197 (BlackRock Cash Funds: Prime — Institutional Shares)

1097 (BlackRock Cash Funds: Government — Institutional Shares)

1107 (BlackRock Cash Funds: Treasury — Institutional Shares).

A direct buyer can ask the Transfer Agent to wire proceeds directly to its designated bank account. ²

Shareholder Servicing Payments

The Funds have adopted a shareholder servicing plan (the “Plan”) that allows each Fund to pay shareholder servicing fees for certain services provided to its shareholders.

The shareholder servicing fees payable pursuant to the Plan are paid to compensate brokers, dealers, financial institutions and industry professionals (including BlackRock, Inc. (“BlackRock”), The PNC Financial Services Group, Inc. (“PNC”), Barclays Bank PLC and their respective affiliates) (each, a “Financial Intermediary”) for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of a Fund’s shares. Because the fees paid by a Fund under the Plan are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment in the Funds and may cost you more than paying other types of sales charges.

Calculating the Funds’ Share Price

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributions

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Short-Term Trading Policy

Market timing is an investment technique involving frequent short-term trading of mutual fund shares designed to exploit market movements or inefficiencies in the way a mutual fund prices its shares. The Boards of Trustees of the Trust and MIP have evaluated the risks of market timing activities by the Funds’ shareholders and have determined that due to (i) each Fund’s policy of seeking to maintain the Fund’s NAV per share at $1.00 each day, (ii) the nature of each Fund’s portfolio holdings and (iii) the nature of each Fund’s shareholders, it is unlikely that (a) market timing would be attempted by a Fund’s shareholders or (b) any attempts to market time a Fund by shareholders would result in a negative impact to the Fund or its shareholders. As a result, the Boards of Trustees of the Trust and MIP have not adopted policies and procedures to deter short-term trading in the Funds. There can be no assurances, however, that the Funds may not, on occasion, serve as a temporary or short-term investment vehicle for those who seek to market time funds offered by other investment companies.

Taxes

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ¹
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ²

²	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

A 3.8% Medicare contribution tax will be imposed on the net investment income (which includes, but is not limited to, interest, dividends and net gain from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married and filing jointly, and of trusts and estates, for taxable years beginning after December 31, 2012.

Master/Feeder Mutual Fund Structure

The Funds do not have their own investment adviser. Instead, each Fund invests all of its assets in the corresponding Master Portfolio, which has an investment objective, strategies and policies substantially identical to those of the Fund. BFA serves as investment adviser to each Master Portfolio. The Master Portfolios may accept investments from other feeder funds. Certain actions involving other feeder funds, such as a substantial withdrawal, could affect the Master Portfolios and, therefore, the Funds.

Feeder Fund Expenses

Feeder Fund Rights

Management of the Funds

Investment Adviser

Administrative Services

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising the shareholder servicing agents on behalf of the Funds.

BAL is entitled to receive fees for these services at the annual rate of 0.05% of the average daily net assets of Institutional Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Conflicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)), in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Funds and their shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Funds. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Funds. One or more Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests in securities, currencies and other instruments in which the Funds directly and indirectly invest. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments

as the Funds. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates or and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

Valuation of Fund Investments

Each Fund’s share price (also known as a Fund’s NAV) is calculated by dividing the value of the net assets of the Fund ( i.e. , the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-money Laundering Requirements

BlackRock Privacy Principles

BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of Institutional Shares of each Fund for the past five years. Certain information reflects financial results for a single Institutional Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in Institutional Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with each Fund’s financial statements, is included in the Funds’ combined annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Institutional
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0022			0.0018			0.0022			0.0043			0.0300
Dividends from net investment income ¹		(0.0022	)		(0.0018	)		(0.0022	)		(0.0043	)		(0.0300	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.22	%		0.18	%		0.22	%		0.43	%		2.85	%
Ratios to Average Net Assets ³
Total expenses		0.12	% ⁴		0.12	% ⁴		0.15	%		0.15	%		0.15	%
Total expenses after fees waived		0.12	% ⁴		0.12	% ⁴		0.12	%		0.12	%		0.12	%
Net investment income		0.22	% ⁴		0.17	% ⁴		0.22	%		0.78	%		2.65	%
Supplemental Data
Net assets, end of year (000)	$	1,211,912		$	1,089,872		$	1,076,268		$	973,221		$	20,223,437

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	Institutional
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0020			0.0016			0.0020			0.0032			0.0300
Dividends from net investment income ¹		(0.0020	)		(0.0016	)		(0.0020	)		(0.0032	)		(0.0300	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.20	%		0.16	%		0.20	%		0.32	%		2.83	%
Ratios to Average Net Assets ³
Total expenses		0.12	% ⁴		0.12	% ⁴		0.15	%		0.17	%		0.15	%
Total expenses after fees waived		0.12	% ⁴		0.12	% ⁴		0.12	%		0.14	%		0.11	%
Net investment income		0.20	% ⁴		0.16	% ⁴		0.20	%		0.39	%		2.80	%
Supplemental Data
Net assets, end of year (000)	$	3,236,082		$	2,282,923		$	3,570,577		$	3,014,591		$	10,812,890

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Government


	Institutional
	Period January 1, 2011 to April 18, 2011 ¹			Year Ended December 31,
	Period January 1, 2011 to April 18, 2011 ¹			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0001			0.0008			0.0009			0.0200
Dividends from net investment income ²		(0.0001	)		(0.0008	)		(0.0009	)		(0.0200	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.01	% ⁴		0.09	%		0.09	%		1.96	%
Ratios to Average Net Assets ⁵
Total expenses		0.13	% ^6,7		0.19	%		0.15	%		0.16	%
Total expenses after fees waived		0.11	% ^6,7		0.11	%		0.08	%		0.10	%
Net investment income		0.05	% ^6,7		0.09	%		0.11	%		0.29	%
Supplemental Data
Net assets, end of period (000)		—	¹	$	5,663		$	10,496		$	1,594,728

¹	There were no Institutional Shares outstanding from April 19, 2011 through December 31, 2011 and during the year ended December 31, 2012.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total Investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁶	Annualized.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.06%.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	Institutional
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0002			0.0004			0.0009			0.0008			0.0200
Dividends from net investment income ¹		(0.0002	)		(0.0004	)		(0.0009	)		(0.0008	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.02	%		0.04	%		0.09	%		0.08	%		1.61	%
Ratios to Average Net Assets ³
Total expenses		0.12	% ⁴		0.12	% ⁵		0.16	%		0.12	%		0.15	%
Total expenses after fees waived		0.11	% ⁴		0.11	% ⁵		0.11	%		0.04	%		0.04	%
Net investment income		0.02	% ⁴		0.03	% ⁵		0.08	%		0.09	%		0.39	%
Supplemental Data
Net assets, end of year (000)	$	4		$	8,941		$	124,791		$	30,011		$	1,305,944

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Management Fee — a fee paid to BFA for managing a Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

[This page intentionally left blank]

For More Information

Funds and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Government

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

Statement of Additional Information

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-INST-0413

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | Select Shares

^Ø

BlackRock Cash Funds: Institutional

Select: BGLXX

^Ø

BlackRock Cash Funds: Prime

Select: BPLXX

^Ø

BlackRock Cash Funds: Government

Select: BVSXX

^Ø

BlackRock Cash Funds: Treasury

Select: BRSXX

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Government	11
	Key Facts About BlackRock Cash Funds: Treasury	15

*Details About the Funds*	Details About the Funds’ Investment Strategies	19
	Investment Risks	20

*Account Information*	Shareholder Information	23
	Shareholder Servicing Payments	25
	Calculating the Funds’ Share Price	26
	Fund Distributions	26
	Short-Term Trading Policy	26
	Taxes	26
	Master/Feeder Mutual Fund Structure	27

*Management of the Funds*	Investment Adviser	28
	Administrative Services	28
	Conflicts of Interest	28
	Valuation of Fund Investments	29
	Certain Fund Policies	29

*Financial Highlights*	Financial Performance of the Funds	31

*Glossary*	Glossary of Investment Terms	35



*For More Information*	Funds and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Select Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of your investment) ¹	Select Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.15%
Administration Fees ²		0.15%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.25%
Fee Waivers and/or Expense Reimbursements ²		(0.05)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.20%

BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. BAL, the administrator of the Fund, has contractually agreed to waive a portion of its administration fees through April 30, 2014. After giving effect to such contractual waivers, the management fee will be 0.07% and the administration fees will be 0.13%. The contractual waivers may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in Select Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Select Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Select Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years
Select Shares	$	20	$	75	$	136	$	313

Principal Investment Strategies of the Fund

The Fund reserves the right to concentrate its investments ( i . e ., invest 25% or more of its total assets in securities of issuers in a particular industry) in the obligations of domestic banks. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e ., interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Repurchase Agreement Risk — If the other party to a repurchase agreement defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security and the market value of the security declines, the Fund may lose money.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Select Shares of BlackRock Cash Funds: Institutional by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Select Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Select Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Select Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.33% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.01% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.03%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (January 26, 2004)
BlackRock Cash Funds: Institutional — Select Shares		0.14	%		0.69	%		2.01	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.87	% ¹

¹	The MFR First Tier Institutional Average is calculated from January 1, 2004.

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment of Select Shares of BlackRock Cash Funds: Institutional is $1 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Select Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account or maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), or with a shareholder servicing agent (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Select Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of your investment) ¹	Select Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.15%
Administration Fees ²		0.15%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.25%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.05)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.20%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Prime Master Portfolio.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Select Shares	$	20	$	75	$	136	$	313

Principal Investment Strategies of the Fund

The Fund is a “feeder” fund that invests all of its investable assets in the Prime Master Portfolio of MIP, which has the same investment objective and strategies as the Fund. All investments are made at the Prime Master Portfolio level. This structure is sometimes called a “master/feeder” structure. The Fund’s investment results will correspond directly to the investment results of the Prime Master Portfolio. For simplicity, the prospectus uses the name of the Fund or the term “Fund” (as applicable) to include Prime Master Portfolio.

Principal Risks of Investing in the Fund

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Select Shares of BlackRock Cash Funds: Prime by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Select Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Select Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

Select Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.32% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.01% (quarter ended March 31, 2010). The year-to-date return as of March 31, 2013 was 0.02%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (January 26, 2004)
BlackRock Cash Funds: Prime — Select Shares		0.12	%		0.66	%		1.99	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.87	% ¹

¹	The MFR First Tier Institutional Average is calculated from January 1, 2004.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Select Shares of BlackRock Cash Funds: Prime is $1 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Select Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account; maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), or with a shareholder servicing agent (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Government

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Select Shares of BlackRock Cash Funds: Government.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of your investment) ¹	Select Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.51%
Administration Fees ²		0.15%
Independent Expenses ³		0.36%
Total Annual Class Operating Expenses		0.61%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.41)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.20%

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Government Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Government Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Government Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Select Shares	$	20	$	154	$	300	$	723

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Select Shares of BlackRock Cash Funds: Government by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Select Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Select Shares of the Fund to that of the Money Fund Report (“MFR”) Government Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Government

Select Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.31% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Government — Select Shares		0.01	%		0.40	%		1.88	%
MFR Government Institutional Average		0.14	%		0.62	%		1.87	% ¹

¹	The MFR Government Institutional Average is calculated from September 1, 2004.

Investment Adviser

Government Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Select Shares of BlackRock Cash Funds: Government is $1 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by

phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Select Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account; maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), or with a shareholder servicing agent (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Select Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of your investment) ¹	Select Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.15%
Administration Fees ²		0.15%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.25%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.05)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.20%

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Select Shares	$	20	$	75	$	136	$	313

Principal Investment Strategies of the Fund

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Select Shares of BlackRock Cash Funds: Treasury by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Select Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Select Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

Select Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Treasury — Select Shares		0.00	%		0.33	%		1.80	%
MFR Treasury and Repo Institutional Average		0.01	%		0.30	%		1.65	% ¹

¹	The MFR Treasury and Repo Institutional Average is calculated from September 1, 2004.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Select Shares of BlackRock Cash Funds: Treasury is $1 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Select Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account; maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), or with a shareholder servicing agent (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Funds

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each a “Fund” and collectively the “Funds”), each a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Funds’ Investment Strategies

Each Fund is a “feeder” fund that invests all of its assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. BlackRock Cash Funds: Institutional invests all of its assets in Money Market Master Portfolio. BlackRock Cash Funds: Prime invests all of its assets in Prime Money Market Master Portfolio. BlackRock Cash Funds: Government invests all of its assets in Government Money Market Master Portfolio. BlackRock Cash Funds: Treasury invests all of its assets in Treasury Money Market Master Portfolio. All discussion of the investment objective, strategies and risks of a particular Fund refers also to the investment objective, strategies and risks of its Master Portfolio, unless otherwise indicated. A description of the relationship of the Funds to their respective Master Portfolios appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital.

BlackRock Cash Funds: Government

The investment objective for BlackRock Cash Funds: Government is to seek a high level of current income consistent with the preservation of capital and liquidity.

BlackRock Cash Funds: Government seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in certain obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements with regard to such obligations; and other money market funds that have substantially the same investment objective and strategies as the Fund. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity.

Investment Risks

Principal Risks of Investing in the Funds

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Account Information

Shareholder Information

Who is Eligible to Invest?

To be eligible to purchase Select Shares, you must:

Invest through an employer-sponsored or individual retirement savings plan;

Invest the proceeds rolled over from such retirement savings plan into an individual retirement account (“IRA”);

Maintain an account with the Transfer Agent, or with a shareholder servicing agent (a “Shareholder Servicing Agent”); or

Initially invest a minimum of $1 million directly through the Transfer Agent.

The minimum initial investment amount for Select Shares of each Fund is $1 million; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Your Shareholder Servicing Agent may charge you a fee and may offer additional account services. Additionally, your Shareholder Servicing Agent may have procedures for placing orders for Select Shares that differ from those of the Funds, such as different investment minimums or earlier trading deadlines. Please contact your Shareholder Servicing Agent directly for more information and details.

How to Buy Shares

Plan Participant. Invest through payroll deductions or make a direct contribution by rolling over an amount from another 401(k) plan or from a rollover IRA (make arrangements through your employer). If you are investing through a Shareholder Servicing Agent, your Shareholder Servicing Agent is responsible for properly transmitting your purchase order to the Transfer Agent and may impose an earlier deadline than the Funds, as described below.

Tax-deferred Investor. Invest through a Shareholder Servicing Agent as provided in your benefit plan documents. Your Shareholder Servicing Agent, plan sponsor or administrator is responsible for properly transmitting your purchase order to the Transfer Agent and may impose an earlier deadline for purchase and redemption orders than the Funds, as described below.

Qualified Buyer. Invest through an account set up with your Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your purchase order to the Transfer Agent and may impose an earlier deadline than the Funds, as described below.

Direct Buyer. See the “Special Instructions for Direct Buyers” section of this prospectus.

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities ( i.e., the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ⁽¹⁾ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

⁽¹⁾	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 23 and December 24, 2013.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

How to Sell Shares

Plan participant and tax-deferred investor. Contact your plan sponsor, administrator or Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your sale order to the Transfer Agent.

Qualified buyer. Contact your Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your sale order to the Transfer Agent.

Direct buyer. See the “Special Instructions for Direct Buyers” section of this prospectus.

The Funds generally remit the proceeds from a sale the same Business Day after receiving a properly executed order to sell. Each Fund can delay payment for one Business Day. A Fund may postpone and/or suspend redemption and payment beyond one Business Day only as follows: (1) for any period during which there is a non-routine closure of the Federal Reserve wire system or applicable Federal Reserve Banks; (2) for any period (a) during which the NYSE is closed other than customary weekend and holiday closings or (b) during which trading on the NYSE is restricted; (3) for any period during which an emergency exists as a result of which (a) disposal of securities owned by a Fund is not reasonably practicable or (b) it is not reasonably practicable for a Fund to fairly determine the net asset value of shares of the Fund; (4) for any period during which the Securities and Exchange Commission (“SEC”) has, by rule or regulation, deemed that (a) trading shall be restricted or (b) an emergency exists; (5) for any period that the SEC may by order permit for your protection; or (6) for any period during which a Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal securities laws as discussed below in this section. Each Fund reserves the right to redeem your shares automatically and close your account for any reason, subject to applicable law, and send you the proceeds, which would reflect the NAV on the day the Fund automatically redeems your shares. For example, a Fund may redeem your shares automatically to reimburse the Fund for any losses sustained by reason of your failure to make full payment for shares purchased or to collect any charge relating to a transaction effected for your benefit that is applicable to the Fund’s shares, as provided from time to time in this Prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Special Instructions for Direct Buyers

A direct buyer who has established an account with a Fund can add to or redeem from that account by phone or through the mail.

(footnotes appear on next page)

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Numbers:

1122 (BlackRock Cash Funds: Institutional — Select Shares)

1199 (BlackRock Cash Funds: Prime — Select Shares)

1099 (BlackRock Cash Funds: Government — Select Shares)

1109 (BlackRock Cash Funds: Treasury — Select Shares)

A direct buyer can ask the Transfer Agent to wire proceeds directly to its designated bank account. ⁽²⁾

⁽¹⁾

⁽²⁾

Shareholder Servicing Payments

The Funds have adopted a shareholder servicing plan (the “Plan”) that allows each Fund to pay shareholder servicing fees for certain services provided to its shareholders.

Calculating the Funds’ Share Price

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributions

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Short-Term Trading Policy

Taxes

The following discussion regarding U.S. federal income taxes is based upon laws in effect as of the date of this Prospectus and summarizes only some of the important U.S. federal income tax considerations affecting the Funds and their U.S. shareholders. This discussion is not intended as a substitute for careful tax planning. Please see the Funds’ SAI for additional U.S. federal income tax information.

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ⁽¹⁾
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ⁽²⁾

⁽¹⁾

⁽²⁾	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

Tax considerations for tax-exempt or foreign investors or those holding Fund shares through a tax-deferred account, such as a 401(k) plan or IRA, will be different. For example, shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Internal Revenue Code generally are not subject to U.S. federal income tax on Fund dividends or distributions or on sales of Fund shares. Because each investor’s tax circumstances are unique and because tax laws are subject to change, you should consult your tax adviser about your investment.

Master/Feeder Mutual Fund Structure

Feeder Fund Expenses

Feeder Fund Rights

Management of the Funds

Investment Adviser

Administrative Services

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising the shareholder servicing agents on behalf of the Funds.

BAL is entitled to receive fees for these services at the annual rate of 0.15% of the average daily net assets of Select Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level. BAL has contractually agreed to waive 0.02% of its administration fee through April 30, 2014.

Conflicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)), in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Funds and their shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Funds. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Funds. One or more Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests in securities, currencies and other instruments in which the Funds directly and indirectly invest. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds

and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Funds. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

Valuation of Fund Investments

Each Fund’s share price (also known as a Fund’s NAV) is calculated by dividing the value of the net assets of the Fund ( i.e ., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

BlackRock Privacy Principles

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of Select Shares of each Fund for the past five years. Certain information reflects financial results for a single Select Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in Select Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with each Fund’s financial statements, is included in the Funds’ combined annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 6:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Select
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0014			0.0010			0.0014			0.0035			0.0300
Dividends from net investment income ¹		(0.0014	)		(0.0010	)		(0.0014	)		(0.0035	)		(0.0300	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.14	%		0.10	%		0.14	%		0.35	%		2.76	%
Ratios to Average Net Assets ³
Total expenses		0.22	% ⁴		0.22	% ⁴		0.25	%		0.23	%		0.28	%
Total expenses after fees waived		0.20	% ⁴		0.20	% ⁴		0.20	%		0.20	%		0.23	%
Net investment income		0.14	% ⁴		0.09	% ⁴		0.13	%		0.57	%		2.05	%
Supplemental Data
Net assets, end of year (000)	$	11,459		$	44,788		$	29,944		$	23,204		$	10,014

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	Select
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0012			0.0008			0.0012			0.0024			0.0280
Dividends from net investment income ¹		(0.0012	)		(0.0008	)		(0.0012	)		(0.0024	)		(0.0280	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.12	%		0.09	%		0.12	%		0.24	%		2.75	%
Ratios to Average Net Assets ³
Total expenses		0.22	% ⁴		0.22	% ⁴		0.25	%		0.27	%		0.25	%
Total expenses after fees waived		0.20	% ⁴		0.20	% ⁴		0.20	%		0.22	%		0.18	%
Net investment income		0.12	% ⁴		0.08	% ⁴		0.12	%		0.24	%		2.95	%
Supplemental Data
Net assets applicable, end of year (000)	$	10,454		$	69,779		$	80,614		$	73,810		$	143,150

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Government


	Select
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0001			0.0002			0.0003			0.0008			0.0200
Dividends from net investment income ¹		(0.0001	)		(0.0002	)		(0.0003	)		(0.0008	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.01	%		0.02	%		0.03	%		0.08	%		1.89	%
Ratios to Average Net Assets ³
Total expenses		0.37	% ⁴		0.30	% ⁵		0.29	%		0.25	%		0.23	%
Total expenses after fees waived		0.16	% ⁴		0.10	% ⁵		0.13	%		0.09	%		0.07	%
Net investment income		0.01	% ⁴		0.00	% ⁵		0.03	%		0.08	%		0.82	%
Supplemental Data
Net assets, end of year (000)	$	16,655		$	8,973		$	17,263		$	69,139		$	81,424

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.23%.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.17%.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	Select
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	¹		0.0003			0.0003			0.0007			0.0200
Dividends from net investment income ²		(0.0000	) ³		(0.0003	)		(0.0003	)		(0.0007	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.00	%		0.03	%		0.03	%		0.08	%		1.55	%
Ratios to Average Net Assets ⁵
Total expenses		0.22	% ⁶		0.21	% ⁷		0.25	%		0.25	%		0.25	%
Total expenses after fees waived		0.15	% ⁶		0.08	% ⁷		0.12	%		0.08	%		0.09	%
Net investment income		0.00	% ⁶		0.00	% ⁷		0.04	%		0.08	%		0.92	%
Supplemental Data
Net assets, end of year (000)	$	10,543		$	13,119		$	288		$	4,815		$	24,340

¹	Amount is less than $0.00005 per share.

²	Dividends are determined in accordance with federal income tax regulations.

³	Amount is greater than $(0.00005) per share.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Dollar-Weighted Average Life — the dollar-weighted average maturity of a Fund’s portfolio calculated without reference to the exceptions used for variable or floating rate securities regarding the use of the interest rate reset dates in lieu of the security’s actual maturity date. “Dollar-weighted” means the larger the dollar value of the debt security in the Fund, the more weight it gets in calculating this average.

Management Fee — a fee paid to BFA for managing a Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

[This page intentionally left blank]

For More Information

Funds and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Government

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

Statement of Additional Information

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-SEL-0413

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | Premium Shares

^Ø

BlackRock Cash Funds: Institutional

Premium: BSSXX

^Ø

BlackRock Cash Funds: Prime

Premium: BPSXX

^Ø

BlackRock Cash Funds: Treasury

Premium: BSPXX

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Treasury	11

*Details About the Funds*	Details About the Funds’ Investment Strategies	15
	Investment Risks	16

*Account Information*	Shareholder Information	19
	Shareholder Servicing Payments	21
	Calculating the Funds’ Share Price	22
	Fund Distributions	22
	Short-Term Trading Policy	22
	Taxes	22
	Master/Feeder Mutual Fund Structure	23

*Management of the Funds*	Investment Adviser	24
	Administrative Services	24
	Conflicts of Interest	24
	Valuation of Fund Investments	25
	Certain Fund Policies	25

*Financial Highlights*	Financial Performance of the Funds	27

*Glossary*	Glossary of Investment Terms	30



*For More Information*	Funds and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Premium Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Premium Shares*
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.10%
Administration Fees		0.10%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.20%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03	)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.17%

*	Fund currently active, but no assets in share class as of December 31, 2012.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in Premium Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Premium Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Premium Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years
Premium Shares	$	17	$	61	$	110	$	252

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

Since no Premium Shares of BlackRock Cash Funds: Institutional were outstanding during the period November 12, 2010 through December 31, 2010 and during the fiscal years ended December 31, 2011 and December 31, 2012, performance for the Fund’s Premium Shares for 2010, 2011 and 2012 is based on the returns of the Fund’s Institutional Shares, which are offered by a separate prospectus, adjusted to reflect the different administration fees borne by the Fund’s Premium Shares.

The bar chart and table in this section provide some indication of the risks of investing in Premium Shares of BlackRock Cash Funds: Institutional by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Premium Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Premium Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Premium Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the ten-year period shown in the bar chart, the highest return for a quarter was 1.34% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.02% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.03%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			10 Years
BlackRock Cash Funds: Institutional — Premium Shares		0.17	%		0.72	%		1.95	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.76	% ¹

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Premium Shares of BlackRock Cash Funds: Institutional is $10 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Premium Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account or maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”); or with a shareholder servicing agent (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Premium Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Premium Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.10%
Administration Fees		0.10%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.20%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.17%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Prime Master Portfolio.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:



	1 Year		3 Years		5 Years		10 Years
Premium Shares	$	17	$	61	$	110	$	252

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Premium Shares of BlackRock Cash Funds: Prime by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Premium Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Premium Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

Premium Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.33% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.02% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.03%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (April 16, 2003)
BlackRock Cash Funds: Prime — Premium Shares		0.15	%		0.69	%		1.95	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.78	% ¹

¹	The MFR First Tier Institutional Average is calculated from April 1, 2003.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Premium Shares of BlackRock Cash Funds: Prime is $10 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Premium Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Premium Shares*
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.10%
Administration Fees		0.10%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.20%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.17%

*	Fund currently active, but no assets in share class as of December 31, 2012.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Premium Shares	$	17	$	61	$	110	$	252

Principal Investment Strategies of the Fund

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

Since no Premium Shares of BlackRock Cash Funds: Treasury were outstanding during the period July 27, 2010 through December 31, 2010 and during the fiscal years ended December 31, 2011 and December 31, 2012, performance for the Fund’s Premium Shares for 2010, 2011 and 2012 is based on the returns of the Fund’s Institutional Shares, which are offered by a separate prospectus, adjusted to reflect the different administration fees borne by the Fund’s Premium Shares.

The bar chart and table in this section provide some indication of the risks of investing in Premium Shares of BlackRock Cash Funds: Treasury by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Premium Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Premium Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

Premium Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.32% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Treasury — Premium Shares		0.00	%		0.33	%		1.81	%
MFR Treasury and Repo Institutional Average		0.01	%		0.30	%		1.65	% ¹

¹	The MFR Treasury and Repo Institutional Average is calculated from September 1, 2004.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Premium Shares of BlackRock Cash Funds: Treasury is $10 million, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Funds

Details About the Funds’ Investment Strategies

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital.

and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity.

Investment Risks

Principal Risks of Investing in the Funds

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

U.S. Government Obligations Risk — Obligations of U.S. government agencies, authorities, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, not all U.S. government securities are backed by the full faith and credit of the United States. Obligations of certain agencies, authorities, instrumentalities and sponsored enterprises of the U.S. government are backed by the full faith and credit of the United States ( e.g. , the Government National Mortgage Association); other obligations are backed by the right of the issuer to borrow from the U.S. Treasury ( e.g. , the Federal Home Loan Banks) and others are supported by the discretionary authority of the U.S. government to purchase an agency’s obligations. Still others are backed only by the credit of the agency, authority, instrumentality or sponsored enterprise issuing the obligation. No assurance can be given that the U.S. government would provide financial support to any of these entities if it is not obligated to do so by law.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Account Information

Shareholder Information

Who is Eligible to Invest?

To be eligible to purchase Premium Shares, you must:

Invest through an employer-sponsored or individual retirement savings plan;

Invest the proceeds rolled over from such retirement savings plan into an individual retirement account (“IRA”);

Maintain an account with the Transfer Agent, or with a shareholder servicing agent (a “Shareholder Servicing Agent”); or

Initially invest a minimum of $10 million directly through the Transfer Agent.

The minimum initial investment amount for Premium Shares of each Fund is $10 million; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

The Funds offer additional share classes with different expenses and expected returns, including share classes you may be eligible to purchase. Call 1-888-204-3956 (toll-free) for additional information.

Your Shareholder Servicing Agent may charge you a fee and may offer additional account services. Additionally, your Shareholder Servicing Agent may have procedures for placing orders for Premium Shares that differ from those of the Funds, such as different investment minimums or earlier trading deadlines. Please contact your Shareholder Servicing Agent directly for more information and details.

How to Buy Shares

Direct Buyer. See the “Special Instructions for Direct Buyers” section of this prospectus.

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities ( i.e. , the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ¹ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

¹	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

How to Sell Shares

Qualified buyer. Contact your Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your sale order to the Transfer Agent.

Direct buyer. See the “Special Instructions for Direct Buyers” section of this prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Special Instructions for Direct Buyers

A direct buyer who has established an account with a Fund can add to or redeem from that account by phone or through the mail.

(footnotes appear on next page)

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Numbers:

1128 (BlackRock Cash Funds: Institutional — Premium Shares)

1198 (BlackRock Cash Funds: Prime — Premium Shares)

1108 (BlackRock Cash Funds: Treasury — Premium Shares)

A direct buyer can ask the Transfer Agent to wire proceeds directly to its designated bank account. ²

When a direct buyer purchases Fund shares and then quickly sells ( e.g. , sells before clearance of the purchase check), the Fund may delay the payment of proceeds for up to ten days to ensure that purchase checks have cleared.

Shareholder Servicing Payments

The Funds have adopted a shareholder servicing plan (the “Plan”) that allows each Fund to pay shareholder servicing fees for certain services provided to its shareholders.

The shareholder servicing fees payable pursuant to the Plan are paid to compensate brokers, dealers, financial institutions and industry professionals (such as BlackRock, Inc. (“BlackRock”) The PNC Financial Services Group, Inc. (“PNC”), Barclays Bank PLC and their respective affiliates) (each, a “Financial Intermediary”) for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of a Fund’s shares. Because the fees paid by a Fund under the Plan are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment in the Funds and may cost you more than paying other types of sales charges.

Calculating the Funds’ Share Price

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributions

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Short-Term Trading Policy

Market timing is an investment technique involving frequent short-term trading of mutual fund shares designed to exploit market movements or inefficiencies in the way a mutual fund prices its shares. The Boards of Trustees of the Trust and MIP have evaluated the risks of market timing activities by the Funds’ shareholders and have determined that due to (i) each Fund’s policy of seeking to maintain the Fund’s net asset value per share at $1.00 each day, (ii) the nature of each Fund’s portfolio holdings and (iii) the nature of each Fund’s shareholders, it is unlikely that (a) market timing would be attempted by a Fund’s shareholders or (b) any attempts to market time a Fund by shareholders would result in a negative impact to the Fund or its shareholders. As a result, the Boards of Trustees of the Trust and MIP have not adopted policies and procedures to deter short-term trading in the Funds. There can be no assurances, however, that the Funds may not, on occasion, serve as a temporary or short-term investment vehicle for those who seek to market time funds offered by other investment companies.

Taxes

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ¹
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ²

²	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

Master/Feeder Mutual Fund Structure

Feeder Fund Expenses

Feeder Fund Rights

Management of the Funds

Investment Adviser

Administrative Services

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising shareholder servicing agents on behalf of the Funds.

BAL is entitled to receive fees for these services at the annual rate of 0.10% of the average daily net assets of Premium Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Conflicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)), in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Funds and their shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Funds. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage, in the ordinary course of business, in activities in which their interests or the interests of their clients may conflict with those of the Funds. One or more of the Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests in securities, currencies and other instruments in which the Funds directly and indirectly invest. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds and/or that engage in and compete for transactions in the same types of securities, currencies and other

instruments as the Funds. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

Valuation of Fund Investments

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

BlackRock Privacy Principles

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of Premium Shares of each Fund for the past five years. Certain information reflects financial results for a single Premium Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in Premium Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with each Fund’s financial statements, is included in the Funds’ combined annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Premium
	Period October 12, 2012 to October 17,			Period January 1, 2010 to November 11,			Year Ended December 31,
	2012 ¹			2010 ²			2009			2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	³		0.0003			0.0038			0.0300
Dividends from net investment income ⁴		(0.0000	) ⁵		(0.0003	)		(0.0038	)		(0.0300	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁶
Based on net asset value		0.00	% ⁷		0.03	% ⁷		0.38	%		2.80	%
Ratios to Average Net Assets ⁸
Total expenses		0.17	% ^9,10		0.20	% ^9,10		0.20	%		0.21	%
Total expenses after fees waived		0.17	% ^9,10		0.17	% ^9,10		0.17	%		0.18	%
Net investment income		0.19	% ^9,10		0.10	% ^9,10		0.48	%		2.79	%
Supplemental Data
Net assets, end of period (000)		—	¹		—	²	$	97,513		$	1,021,216

¹	There were no Premium Shares outstanding during the fiscal year ended December 31, 2012 except from October 12, 2012 through October 17, 2012.

²	There were no Premium Shares outstanding from November 12, 2010 through December 31, 2010 and during the fiscal year ended December 31, 2011.

³	Amount is less than $0.00005 per share.

⁴	Dividends are determined in accordance with federal income tax regulations.

⁵	Amount is greater than $(0.00005) per share.

⁶	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁷	Aggregate total investment return.

⁸	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the period ended November 11, 2010 and the two years ended December 31, 2009, which include gross expenses.

⁹	Annualized.

¹⁰	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	Premium
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0015			0.0011			0.0015			0.0027			0.0270
Dividends from net investment income ¹		(0.0015	)		(0.0011	)		(0.0015	)		(0.0027	)		(0.0270	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.15	%		0.11	%		0.15	%		0.27	%		2.78	%
Ratios to Average Net Assets ³
Total expenses		0.17	% ⁴		0.17	% ⁴		0.20	%		0.23	%		0.21	%
Total expenses after fees waived		0.17	% ⁴		0.17	% ⁴		0.17	%		0.20	%		0.17	%
Net investment income		0.16	% ⁴		0.11	% ⁴		0.14	%		0.34	%		2.60	%
Supplemental Data
Net assets, end of year (000)	$	3,481,506		$	1,460,178		$	1,232,743		$	1,817,088		$	4,304,633

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	Premium
	Period December 20,			Period January 1, 2010 to July 26,			Year Ended December 31,
	2012 ¹			2010 ²			2009			2008
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	³		0.0003			0.0007			0.0200
Dividends from net investment income ⁴		(0.0000	) ⁵		(0.0003	)		(0.0007	)		(0.0200	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁶
Based on net asset value		0.00	% ⁷		0.03	% ⁷		0.08	%		1.57	%
Ratios to Average Net Assets ⁸
Total expenses		0.00	% ^9,10		0.20	% ¹⁰		0.19	%		0.20	%
Total expenses after fees waived		0.00	% ^9,10		0.11	% ¹⁰		0.08	%		0.07	%
Net investment income		0.00	% ^9,10		0.05	% ¹⁰		0.09	%		1.17	%
Supplemental Data
Net assets, end of period (000)		—	¹		—	²	$	2,542		$	65,095

¹	There were no Premium Shares outstanding during the fiscal year ended December 31, 2012 except for December 20, 2012.

²	There were no Premium Shares outstanding from July 27, 2010 through December 31, 2010 and during the fiscal year ended December 31, 2011.

³	Amount is less than $0.00005 per share.

⁴	Dividends are determined in accordance with federal income tax regulations.

⁵	Amount is greater than $(0.00005) per share.

⁶	Where applicable, total investment return include the reinvestment of dividends and distributions.

⁷	Aggregate total investment return.

⁸	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the period ended July 26, 2010 and the two years ended December 31, 2009, which include gross expenses.

⁹	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

¹⁰	Annualized.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Management Fee — a fee paid to BFA for managing a Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

For More Information

Funds and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

Statement of Additional Information

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-PRE-0413

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | SL Agency Shares

^Ø

BlackRock Cash Funds: Institutional

SL Agency: —

^Ø

BlackRock Cash Funds: Prime

SL Agency: —

^Ø

BlackRock Cash Funds: Government

SL Agency: —

^Ø

BlackRock Cash Funds: Treasury

SL Agency: —

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Government	11
	Key Facts About BlackRock Cash Funds: Treasury	15

*Details About the Funds*	Details About the Funds’ Investment Strategies	19
	Investment Risks	20

*Account Information*	Shareholder Information	23
	Calculating the Funds’ Share Price	24
	Fund Distributions	24
	Short-Term Trading Policy	24
	Taxes	24
	Master/Feeder Mutual Fund Structure	25

*Management of the Funds*	Investment Adviser	26
	Administrative Services	26
	Conflicts of Interest	26
	Valuation of Fund Investments	27
	Certain Fund Policies	27

*Financial Highlights*	Financial Performance of the Funds	29

*Glossary*	Glossary of Investment Terms	33



*For More Information*	Fund and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold SL Agency Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	SL Agency Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.02%
Administration Fees		0.02%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.12%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.09%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in SL Agency Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in SL Agency Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that SL Agency Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Years		3 Years		5 Years		10 Years
SL Agency Shares	$	9	$	36	$	65	$	151

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in SL Agency Shares of BlackRock Cash Funds: Institutional. The bar chart shows the returns of SL Agency Shares of the Fund for the two complete calendar years since the Fund’s inception. The average annual total return table compares the average annual total return of SL Agency Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

SL Agency Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 0.08% (quarter ended September 30, 2010) and the lowest return for a quarter was 0.04% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.05%.


As of 12/31/12 Average Annual Total Returns	1 Year			Since Inception (February 4, 2009)
BlackRock Cash Funds: Institutional — SL Agency Shares		0.25	%		0.27	%
MFR First Tier Institutional Average		0.07	%		0.12	% ¹

¹	MFR First Tier Institutional Average is calculated from February 1, 2009.

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

Currently, the only eligible investors for SL Agency Shares of BlackRock Cash Funds: Institutional are investment companies for which (i) BFA, BTC, or an affiliate provide investment advisory or administrative services, or (ii) BTC acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in SL Agency Shares of the Fund. Please contact BTC or State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), for more information.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time, each day the bond markets and the Fedwire Funds Service are open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold SL Agency Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	SL Agency Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.02%
Administration Fees		0.02%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.12%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.09%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Prime Master Portfolio.

BFA, the investment adviser to (the “Prime Master Portfolio”), a series of MIP, has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
SL Agency Shares	$	9	$	36	$	65	$	151

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in SL Agency Shares of BlackRock Cash Funds: Prime. The bar chart shows the returns of SL Agency Shares of the Fund for the two complete calendar years since the Fund’s inception. The average annual total return table compares the average annual total return of SL Agency Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

SL Agency Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the bar chart, the highest return for a quarter was 0.07% (quarter ended September 30, 2010) and the lowest return for a quarter was 0.04% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.05%.


As of 12/31/12 Average Annual Total Returns	1 Year			Since Inception (February 4, 2009)
BlackRock Cash Funds: Prime — SL Agency Shares		0.23	%		0.24	%
MFR First Tier Institutional Average		0.07	%		0.12	% ¹

¹	The MFR First Tier Institutional Average is calculated from February 1, 2009.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

Currently, the only eligible investors for SL Agency Shares of BlackRock Cash Funds: Prime are investment companies for which (i) BFA, BTC, or an affiliate provide investment advisory or administrative services, or (ii) BTC acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in SL Agency Shares of the Fund. Please contact BTC or State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), for more information.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time, on each day the bond markets and Fedwire Funds Service are open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Government

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold SL Agency Shares of BlackRock Cash Funds: Government.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	SL Agency Shares*
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.38%
Administration Fees		0.02%
Independent Expenses ³		0.36%
Total Annual Class Operating Expenses		0.48%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.39)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.09%

*	Fund currently active, but no assets in share class as of December 31, 2012.

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Government Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Government Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Government Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
SL Agency Shares	$	9	$	115	$	230	$	566

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

Since no SL Agency Shares of BlackRock Cash Funds: Government were outstanding during the periods March 15, 2010 through December 31, 2010, March 31, 2011 through December 1, 2011 and December 15, 2011 through December 31, 2011 and for the fiscal year ended December 31, 2012, performance for the Fund’s SL Agency Shares for 2010, 2011 and 2012 is based on the returns of the Fund’s Institutional Shares and Select Shares, respectively, which are offered by separate prospectuses, adjusted to reflect the different administration fees borne by the Fund’s SL Agency Shares.

The bar chart and table in this section provide some indication of the risks of investing in SL Agency Shares of BlackRock Cash Funds: Government. The bar chart shows the returns of Institutional Shares of the Fund for the two complete calendar years since the Fund’s inception. The average annual total return table compares the average annual total return of SL Agency Shares of the Fund to that of the Money Fund Report (“MFR”) Government Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Government

SL Agency Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the period shown in the chart above, the highest return for a quarter was 0.05% (quarter ended December 31, 2011) and the lowest return for a quarter was 0.02% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.01%.


As of 12/31/12 Average Annual Total Returns	1 Year			Since Inception (February 4, 2009)
BlackRock Cash Funds: Government — SL Agency Shares		0.08	%		0.07	%
MFR Government Institutional Average		0.14	%		0.24	% ¹

¹	The MFR Government Institutional Average is calculated from February 1, 2009.

Investment Adviser

Government Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

Currently, the only eligible investors for SL Agency Shares of BlackRock Cash Funds: Government are investment companies for which (i) BFA, BTC, or an affiliate provide investment advisory or administrative services, or (ii) BTC acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in SL Agency Shares of the Fund. Please contact BTC or State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), for more information.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time, on each day the bond markets and Fedwire Funds Service are open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold SL Agency Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	SL Agency Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.02%
Administration fees		0.02%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.12%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.09%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
SL Agency Shares	$	9	$	36	$	65	$	151

Principal Investment Strategies of the Fund

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in SL Agency Shares of BlackRock Cash Funds: Treasury. The bar chart shows the returns of SL Agency Shares of the Fund for the two complete calendar years since the Fund’s inception. The average annual total return table compares the average annual total return of SL Agency Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

SL Agency Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 0.03% (quarter ended December 31, 2012) and the lowest return for a quarter was 0.00% (quarter ended June 30, 2011). The year-to-date return as of March 31, 2013 was 0.01%.


As of 12/31/12 Average Annual Total Returns	1 Year			Since Inception (February 4, 2009)
BlackRock Cash Funds: Treasury — SL Agency Shares		0.06	%		0.08	%
MFR Treasury and Repo Institutional Average		0.01	%		0.02	% ¹

¹	The MFR Treasury and Repo Institutional Average is calculated from February 1, 2009.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

Currently, the only eligible investors for SL Agency Shares of BlackRock Cash Funds: Treasury are investment companies for which (i) BFA, BTC, or an affiliate provide investment advisory or administrative services, or (ii) BTC acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in SL Agency Shares of the Fund. Please contact BTC or State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), for more information.

You may purchase or sell shares without paying a sales charge. Your order to purchase or sell shares must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time, on each day the bond markets and Fedwire Funds Service are open (a “Business Day”) (or, if the Fund closes early, by such closing time) to purchase or sell shares at that day’s net asset value. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Funds

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each a “Fund” and collectively the “Funds”), each a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Funds’ Investment Strategies

Each Fund is a “feeder” fund that invests all of its assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. BlackRock Cash Funds: Institutional invests all of its assets in Money Market Master Portfolio. BlackRock Cash Funds: Prime invests all of its assets in Prime Money Market Master Portfolio. BlackRock Cash Funds: Government invests all of its assets in Government Money Market Master Portfolio. BlackRock Cash Funds: Treasury invests all of its assets in Treasury Money Market Master Portfolio. All discussion of the investment objective, strategies and risks of a particular Fund refers also to the investment objective, strategies and risks of its Master Portfolio, unless otherwise indicated. A description of the relationship of the Funds to their respective Master Portfolios appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital.

BlackRock Cash Funds: Government

The investment objective for BlackRock Cash Funds: Government is to seek a high level of current income consistent with the preservation of capital and liquidity.

BlackRock Cash Funds: Government seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in certain obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements with regard to such obligations; and other money market funds that have substantially the same investment objective and strategies as the Fund. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity.

Investment Risks

Principal Risks of Investing in the Funds

foreign issuer may not be available, and unfavorable political, economic or governmental developments in the foreign country involved could affect the payment of principal and interest.

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

U.S. Government Obligations Risk — Obligations of U.S. government agencies, authorities, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, not all U.S. government securities are backed by the full faith and credit of the United States. Obligations of certain agencies, authorities, instrumentalities and sponsored enterprises of the U.S. government are backed by the full faith and credit of the United States ( e.g. , the Government National Mortgage Association); other obligations are backed by the right of the issuer to borrow from the U.S. Treasury ( e.g ., the Federal Home Loan Banks) and others are supported by the discretionary authority of the U.S. government to purchase an agency’s obligations. Still others are backed only by the credit of the agency, authority, instrumentality or sponsored enterprise issuing the obligation. No assurance can be given that the U.S. government would provide financial support to any of these entities if it is not obligated to do so by law.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Account Information

Shareholder Information

Who is Eligible to Invest?

Currently, the only eligible investors for SL Agency Shares of the Funds are investment companies for which (i) BFA, BTC, or an affiliate provide investment advisory or administrative services, or (ii) BTC acts as securities lending agent and which have directed BTC on their behalf to invest securities lending cash collateral in the Funds. Please contact BTC or the Transfer Agent for more information.

In order to invest, a completed account application form must be submitted to, and processed by, BTC or the Transfer Agent and an account number assigned. You may be asked to provide information to verify your identity when opening an account.

How to Buy Shares

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities ( i.e. , the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ¹ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

How to Sell Shares

You may sell Fund shares without paying a sales charge. Your order to sell shares must be received in proper form, as determined by the Transfer Agent or BTC, as intermediary, pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, by such closing time) to sell shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day.

¹	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

NAV on the day the Fund automatically redeems your shares. For example, a Fund may redeem your shares automatically to reimburse the Fund for any losses sustained by reason of your failure to make full payment for shares purchased or to collect any charge relating to a transaction effected for your benefit that is applicable to the Fund’s shares, as provided from time to time in this Prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Calculating the Funds’ Share Price

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributions

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Short-Term Trading Policy

Taxes

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ¹
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ²

²	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

Master/Feeder Mutual Fund Structure

Feeder Fund Expenses

Feeder Fund Rights

Management of the Funds

Investment Adviser

BFA is located at 400 Howard Street, San Francisco, California 94105. BFA is an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”). As of March 31, 2013, BFA and its affiliates had approximately $3.936 trillion in investment company and other portfolio assets under management.

Administrative Services

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services; and

Preparation of proxy statements and shareholder reports.

BAL is entitled to receive fees for these services at the annual rate of 0.02% of the average daily net assets of SL Agency Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Conflicts of Interest

One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Funds. The trading activities of these Affiliates are carried out

without reference to positions held directly or indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

Valuation of Fund Investments

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

BlackRock Privacy Principles

other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of SL Agency Shares of each Fund for the period of the Fund’s operations. Certain information reflects financial results for a single SL Agency Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in SL Agency Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers, LLP, whose report, along with the Funds’ financial statements, is included in the Funds’ annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) Monday through Friday from 8:30 a.m. to 5:30 p.m. Eastern Time.

BlackRock Cash Funds: Institutional


	SL Agency
	Year Ended December 31,									Period February 4, 2009 ¹ to December 31, 2009
	2012			2011			2010			Period February 4, 2009 ¹ to December 31, 2009
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0025			0.0021			0.0025			0.0035
Dividends from net investment income ²		(0.0025	)		(0.0021	)		(0.0025	)		(0.0035	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.25	%		0.21	%		0.25	%		0.36	% ⁴
Ratios to Average Net Assets ⁵
Total expenses		0.09	% ⁶		0.09	% ⁶		0.12	%		0.12	% ⁷
Total expenses after fees waived		0.09	% ⁶		0.09	% ⁶		0.09	%		0.09	% ⁷
Net investment income		0.25	% ⁶		0.20	% ⁶		0.24	%		0.38	% ⁷
Supplemental Data
Net assets, end of period (000)	$	33,350,562		$	26,815,279		$	17,938,932		$	18,832,492

¹	Commencement of operations.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the fiscal year ended December 31, 2010 and the period ended December 31, 2009, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Annualized.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	SL Agency
	Year Ended December 31,									Period February 4, 2009 ¹ to December 31, 2009
	2012			2011			2010			Period February 4, 2009 ¹ to December 31, 2009
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0023			0.0019			0.0023			0.0028
Dividends from net investment income ²		(0.0023	)		(0.0019	)		(0.0023	)		(0.0028	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.23	%		0.19	%		0.23	%		0.28	% ⁴
Ratios to Average Net Assets ⁵
Total expenses		0.09	% ⁶		0.09	% ⁶		0.12	%		0.14	% ⁷
Total expenses after fees waived		0.09	% ⁶		0.09	% ⁶		0.09	%		0.11	% ⁷
Net investment income		0.23	% ⁶		0.19	% ⁶		0.22	%		0.31	% ⁷
Supplemental Data
Net assets, end of period (000)	$	5,877,464		$	4,830,517		$	3,696,051		$	58,600,881

¹	Commencement of operations.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the year ended December 31, 2010 and the period ended December 31, 2009, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Annualized.

Financial Highlights (continued)

BlackRock Cash Funds: Government


	SL Agency
	Period January 1, 2011 to December 14, 2011 ¹			Period January 1, 2010 to March 14, 2010 ²			Period February 4, 2009 ³ to December 31, 2009
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00
Net investment income		0.0002			0.0002			0.0009
Dividends from net investment income ⁴		(0.0002	)		(0.0002	)		(0.0009	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00
Total Investment Return ^5,6
Based on net asset value		0.02	%		0.02	%		0.09	%
Ratios to Average Net Assets ^7,8
Total expenses		0.10	% ⁹		0.12	%		0.12	%
Total expenses after fees waived		0.09	% ⁹		0.02	%		0.07	%
Net investment income		0.08	% ⁹		0.08	%		0.10	%
Supplemental Data
Net assets, end of period (000)		—	¹		—	²	$	563,288

¹	There were no SL Agency Shares outstanding from March 31, 2011 through December 1, 2011, from December 15, 2011 through December 31, 2011 and during the year ended December 31, 2012.

²	There were no SL Agency Shares outstanding from March 15, 2010 through December 31, 2010.

³	Commencement of operations.

⁴	Dividends are determined in accordance with federal income tax regulations.

⁵	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁶	Aggregate total Investment return.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the periods ended March 14, 2010 and December 31, 2009, which include gross expenses.

⁸	Annualized.

⁹	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	SL Agency
	Year Ended December 31,									Period February 4, 2009 ¹ to December 31, 2009
	2012			2011			2010			Period February 4, 2009 ¹ to December 31, 2009
Per Share Operating Performance
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0006			0.0005			0.0011			0.0008
Dividends from net investment income ²		(0.0006	)		(0.0005	)		(0.0011	)		(0.0008	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ³
Based on net asset value		0.06	%		0.05	%		0.12	%		0.09	% ⁴
Ratios to Average Net Assets ⁵
Total expenses		0.09	% ⁶		0.09	% ⁷		0.13	%		0.12	% ⁸
Total expenses after fees waived		0.09	% ⁶		0.08	% ⁷		0.08	%		0.07	% ⁸
Net investment income		0.06	% ⁶		0.03	% ⁷		0.11	%		0.08	% ⁸
Supplemental Data
Net assets, end of period (000)	$	1,525,904		$	682,865		$	1,457,943		$	4,009,074

¹	Commencement of operations.

²	Dividends are determined in accordance with federal income tax regulations.

³	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁴	Aggregate total investment return.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the year ended December 31, 2010 and the period ended December 31, 2009, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

⁸	Annualized.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Management Fee — a fee paid to BFA for managing a Master Portfolio

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

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For More Information

Funds and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Government

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

Statement of Additional Information

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You may also view and copy public information about each Fund, including the SAI, by visiting the EDGAR database on the SEC’s website (http://www.sec.gov) or the SEC’s Public Reference Room in Washington, D.C. Copies of this information can be obtained, for a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing to the Public Reference Room of the SEC, Washington, D.C. 20549. Information about obtaining documents on the SEC’s website without change can be obtained by calling the SEC directly at (800) SEC-0330.

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-SLA-0413

APRIL 30, 2013

PROSPECTUS

BlackRock Funds III | Trust Shares

^Ø

BlackRock Cash Funds: Institutional

Trust: BGTXX

^Ø

BlackRock Cash Funds: Prime

Trust: BPEXX

^Ø

BlackRock Cash Funds: Government

Trust: BVTXX

^Ø

BlackRock Cash Funds: Treasury

Trust: BYTXX

This Prospectus contains information you should know before investing, including information about risks.

Please read it before you invest and keep it for future reference.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Funds, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Key Facts About BlackRock Cash Funds: Institutional	3
	Key Facts About BlackRock Cash Funds: Prime	7
	Key Facts About BlackRock Cash Funds: Government	11
	Key Facts About BlackRock Cash Funds: Treasury	15

*Details About the Funds*	Details About the Funds’ Investment Strategies	19
	Investment Risks	20

*Account Information*	Shareholder Information	23
	Shareholder Servicing Payments	25
	Calculating the Funds’ Share Price	26
	Fund Distributions	26
	Short-Term Trading Policy	26
	Taxes	26
	Master/Feeder Mutual Fund Structure	27

*Management of the Funds*	Investment Adviser	28
	Administrative Services	28
	Conflicts of Interest	28
	Valuation of Fund Investments	29
	Certain Fund Policies	29

*Financial Highlights*	Financial Performance of the Funds	31

*Glossary*	Glossary of Investment Terms	35



*For More Information*	Funds and Service Provides	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Trust Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Trust Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.38%
Administration Fees		0.38%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.48%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.45%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in Trust Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Trust Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Trust Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:



	1 Year		3 Years		5 Years		10 Years
Trust Shares	$	46	$	151	$	266	$	601

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Trust Shares of BlackRock Cash Funds: Institutional by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Trust Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Trust Shares of the Fund to that of the Money Fund Report (“MFR”) All Taxable Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Trust Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.27% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (June 10, 2004)
BlackRock Cash Funds: Institutional — Trust Shares		0.00	%		0.54	%		1.87	%
MFR All Taxable Average		0.03	%		0.46	%		1.70	% ¹

¹	The MFR All Taxable Average is calculated from June 1, 2004.

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Trust shares of BlackRock Cash Funds: Institutional is $100,000, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

To be eligible to purchase Trust Shares of the Fund, you must invest through an employer-sponsored or individual retirement savings plan; invest the proceeds rolled over from such retirement savings plan into an individual retirement account; maintain an account with State Street Bank and Trust Company, the Fund’s transfer agent (the “Transfer Agent”), or with one of a shareholder servicing agents (a “Shareholder Servicing Agent”). Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Prime

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Trust Shares of BlackRock Cash Funds: Prime.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Trust Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.38%
Administration Fees		0.38%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.48%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.45%

The fees and expenses shown in the table above and the example that follows include the expenses of both the Fund and Prime Money Market Master Portfolio (the “Prime Master Portfolio”), a series of Master Investment Portfolio (“MIP”), in which the Fund invests. Management fees are paid by Prime Master Portfolio.

²	BFA, has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Prime Master Portfolio. BlackRock Advisors, LLC (“BAL”), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Prime Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Prime Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Trust Shares	$	46	$	151	$	266	$	601

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Trust Shares of BlackRock Cash Funds: Prime by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Trust Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Trust Shares of the Fund to that of the Money Fund Report (“MFR”) All Taxable Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Prime

Trust Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.26% (quarter ended September 30, 2007) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (June 10, 2004)
BlackRock Cash Funds: Prime — Trust Shares		0.00	%		0.52	%		1.85	%
MFR All Taxable Average		0.03	%		0.46	%		1.70	% ¹

¹	The MFR All Taxable Average is calculated from June 1, 2004.

Investment Adviser

Prime Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as ”BFA”).

Purchase and Sale of Shares

The minimum initial investment for Trust shares of BlackRock Cash Funds: Prime is $100,000, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Government

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Trust Shares of BlackRock Cash Funds: Government.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Trust Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.74%
Administration Fees		0.38%
Independent Expenses ³		0.36%
Total Annual Class Operating Expenses		0.84%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.39)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.45%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Government Master Portfolio. BlackRock Advisors, LLC ("BAL"), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Government Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Government Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Trust Shares	$	46	$	229	$	428	$	1,001

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Trust Shares of BlackRock Cash Funds: Government by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Trust Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Trust Shares of the Fund to that of the Money Fund Report (“MFR”) All Government Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Government

Trust Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.24% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Government — Trust Shares		0.00	%		0.36	%		1.75	%
MFR All Government Average		0.14	%		0.63	%		1.83	% ¹

¹	The MFR All Government Average is calculated from September 1, 2004.

Investment Adviser

Government Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Trust shares of BlackRock Cash Funds: Government is $100,000, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Fund Overview

Key Facts About BlackRock Cash Funds: Treasury

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Trust Shares of BlackRock Cash Funds: Treasury.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Trust Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		None
Other Expenses		0.38%
Administration Fees		0.38%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.48%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.45%

²	BFA has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Independent Expenses consist of the Fund’s allocable portion of the fees and expenses of the independent trustees of the Trust and MIP, counsel to such independent trustees and the independent registered public accounting firm that provides audit services to the Fund and Treasury Master Portfolio. BlackRock Advisors, LLC ("BAL"), the administrator to the Fund, and BlackRock Fund Advisors (“BFA”), the investment adviser to Treasury Master Portfolio, have contractually agreed to reimburse, or provide offsetting credits to, the Fund and Treasury Master Portfolio, as applicable, for Independent Expenses through April 30, 2014. After giving effect to such contractual arrangements, Independent Expenses will be 0.00%. Such contractual arrangements may not be terminated prior to May 1, 2014 without the consent of the Boards of Trustees of the Trust and MIP.

Example:


	1 Year		3 Years		5 Years		10 Years
Trust Shares	$	46	$	151	$	266	$	601

Principal Investment Strategies of the Fund

U.S. Treasury obligations are backed by the full faith and credit of the U.S. government. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Principal Risks of Investing in the Fund

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Trust Shares of BlackRock Cash Funds: Treasury by showing the changes in the Fund’s performance from year to year. The bar chart shows the returns of Trust Shares of the Fund for each complete calendar year since the Fund’s inception. The average annual total return table compares the average annual total return of Trust Shares of the Fund to that of the Money Fund Report (“MFR”) Treasury and Repo Retail Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Treasury

Trust Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.25% (quarter ended December 31, 2006) and the lowest return for a quarter was 0.00% (quarter ended December 31, 2012). The year-to-date return as of March 31, 2013 was 0.00%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			Since Inception (September 1, 2004)
BlackRock Cash Funds: Treasury — Trust Shares		0.00	%		0.31	%		1.69	%
MFR Treasury and Repo Retail Average		0.01	%		0.23	%		1.46	% ¹

¹	The MFR Treasury and Repo Retail Average is calculated from September 1, 2004.

Investment Adviser

Treasury Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Trust Shares of BlackRock Cash Funds: Treasury is $100,000, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Funds

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each a “Fund” and collectively the “Funds”), each a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Funds’ Investment Strategies

Each Fund is a “feeder” fund that invests all of its assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. BlackRock Cash Funds: Institutional invests all of its assets in Money Market Master Portfolio. BlackRock Cash Funds: Prime invests all of its assets in Prime Money Market Master Portfolio. BlackRock Cash Funds: Government invests all of its assets in Government Money Market Master Portfolio. BlackRock Cash Funds: Treasury invests all of its assets in Treasury Money Market Master Portfolio. All discussion of the investment objective, strategies and risks of a particular Fund refers also to the investment objective, strategies and risks of its Master Portfolio, unless otherwise indicated. A description of the relationship of the Funds to their respective Master Portfolios appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

Each Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

Each Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

Each Fund will not acquire any illiquid security ( i.e ., securities that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the value ascribed to them by the Fund) if, immediately following such purchase, more than 5% of the Fund’s total assets are invested in illiquid securities. Each Fund will not acquire any security other than a daily liquid asset unless, immediately following such purchase, at least 10% of its total assets would be invested in daily liquid assets and no Fund will acquire any security other than a weekly liquid asset unless, immediately following such purchase, at least 30% of its total assets would be invested in weekly liquid assets. For a discussion of daily liquid assets and weekly liquid assets, please see the Glossary on page 35.

BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime

The investment objective for each of BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime is to seek a high level of income consistent with liquidity and the preservation of capital.

and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

BlackRock Cash Funds: Government

The investment objective for BlackRock Cash Funds: Government is to seek a high level of current income consistent with the preservation of capital and liquidity.

BlackRock Cash Funds: Government seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, at least 80% of the Fund’s assets will be invested in certain obligations of the U.S. government, its agencies and instrumentalities; repurchase agreements with regard to such obligations; and other money market funds that have substantially the same investment objective and strategies as the Fund. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

BlackRock Cash Funds: Treasury

The investment objective for BlackRock Cash Funds: Treasury is to seek a high level of current income consistent with the preservation of capital and liquidity.

Investment Risks

Principal Risks of Investing in the Funds

Income Risk — Each Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

addition, certain asset backed securities are based on loans that are unsecured, which means that there is no collateral to seize if the underlying borrower defaults. Certain mortgage-backed securities in which the Fund may invest may also provide a degree of investment leverage, which could cause the Fund to lose all or substantially all of its investment.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Other Risks of Investing in the Funds

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Account Information

Shareholder Information

Who is Eligible to Invest?

To be eligible to purchase Trust Shares, you must:

Invest through an employer-sponsored or individual retirement savings plan;

Invest the proceeds rolled over from such retirement savings plan into an individual retirement account (“IRA”);

Maintain an account with the Transfer Agent, or with a shareholder servicing agent (a “Shareholder Servicing Agent”); or

Initially invest a minimum of $100,000 directly through the Transfer Agent.

The minimum initial investment amount for Trust Shares of each Fund is $100,000; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your Shareholder Servicing Agent or the Transfer Agent for more information.

Your Shareholder Servicing Agent may charge you a fee and may offer additional account services. Additionally, your Shareholder Servicing Agent may have procedures for placing orders for Trust Shares that differ from those of the Funds, such as different investment minimums or earlier trading deadlines. Please contact your Shareholder Servicing Agent directly for more information and details.

How to Buy Shares

Tax-deferred Investor . Invest through a Shareholder Servicing Agent as provided in your benefit plan documents. Your Shareholder Servicing Agent, plan sponsor or administrator is responsible for properly transmitting your purchase order to the Transfer Agent and may impose an earlier deadline for purchase and redemption orders than the Funds, as described below.

Qualified Buyer . Invest through an account set up with your Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your purchase order to the Transfer Agent and may impose an earlier deadline than the Funds, as described below.

Direct Buyer. See the “Special Instructions for Direct Buyers” section of this prospectus.

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Funds are generally open Monday through Friday and are closed on weekends and generally closed on all other days that the primary markets for the Master Portfolios’ portfolio securities ( i.e., the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early ⁽¹⁾ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

Each Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

⁽¹⁾	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

How to Sell Shares

Plan participant and tax-deferred investor. Contact your plan sponsor, administrator or Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your sale order to the Transfer Agent.

Qualified buyer. Contact your Shareholder Servicing Agent. Your Shareholder Servicing Agent is responsible for properly transmitting your sale order to the Transfer Agent.

Direct buyer. See the “Special Instructions for Direct Buyers” section of this Prospectus.

In addition, each Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Special Instructions for Direct Buyers

A direct buyer who has established an account with a Fund can add to or redeem from that account by phone or through the mail.

(footnotes appear on next page)

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Numbers:

1124 (BlackRock Cash Funds: Institutional — Trust Shares)

1194 (BlackRock Cash Funds: Prime — Trust Shares)

1094 (BlackRock Cash Funds: Government — Trust Shares)

1104 (BlackRock Cash Funds: Treasury — Trust Shares)

A direct buyer can ask the Transfer Agent to wire proceeds directly to its designated bank account. ⁽²⁾

⁽¹⁾

⁽²⁾

Shareholder Servicing Payments

The Funds have adopted a shareholder servicing plan (the “Plan”) that allows each Fund to pay shareholder servicing fees for certain services provided to its shareholders.

The shareholder servicing fees payable pursuant to the Plan are paid to compensate brokers, dealers, financial institutions and industry professionals (such as BlackRock, Inc. (“BlackRock”) The PNC Financial Services Group, Inc. (“PNC”), Barclays Bank PLC and their respective affiliates) (each, a “Financial Intermediary”) for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of a Fund’s shares. Because the fees paid by a Fund under the Plan are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment in the Funds and may cost you more than paying other types of sales charges.

Calculating the Funds’ Share Price

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Fund Distributions

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

Short-Term Trading Policy

Taxes

Distributions from the Funds generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ⁽¹⁾
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ⁽²⁾

⁽¹⁾

⁽²⁾	Normally, the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

A 3.8% Medicare contribution tax will be imposed on the net investment income (which includes, but is not limited to, interest dividends and net gain from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married and filing jointly, and of trusts and estates, for taxable years beginning after December 31, 2012.

Tax considerations for tax-exempt or foreign investors or those holding fund shares through a tax-deferred account, such as a 401(k) plan or IRA, will be different. For example, shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Internal Revenue Code generally are not subject to U.S. federal income tax on Fund dividends or distributions or on sales of Fund shares. Because each investor’s tax circumstances are unique and because tax laws are subject to change, you should consult your tax adviser about your investment.

Master/Feeder Mutual Fund Structure

Feeder Fund Expenses

Feeder Fund Rights

Management of the Funds

Investment Adviser

Administrative Services

BAL provides the following services, among others, as the Funds’ administrator:

Supervises the Funds’ administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising the shareholder servicing agents on behalf of the Funds.

BAL is entitled to receive fees for these services at the annual rate of 0.38% of the average daily net assets of Trust Shares of each Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Funds, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Funds or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Conflicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)) in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Funds and their shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Funds. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Funds. One or more Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests in securities, currencies and other instruments in which the Funds directly and indirectly invest. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Funds and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Funds. The trading activities of these Affiliates are carried out without reference to positions held directly or

indirectly by the Funds and may result in an Affiliate having positions that are adverse to those of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Funds may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds, and may receive compensation for such services. The Funds may also make brokerage and other payments to Affiliates in connection with the Funds’ portfolio investment transactions.

Valuation of Fund Investments

Each Fund’s share price (also known as a Fund’s NAV) is calculated by dividing the value of the net assets of the Fund (i.e., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

The Funds seek to maintain a constant NAV per share of $1.00, although they can offer no assurance that they will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

BlackRock Privacy Principles

other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

Financial Highlights

The financial highlights tables are intended to help investors understand the financial performance of Trust Shares of each Fund for the past five years. Certain information reflects financial results for a single Trust Share of each Fund. The total returns in the tables represent the rate of return that an investor would have earned (or lost) on an investment in Trust Shares of a given Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with each Fund’s financial statements, is included in the Funds’ combined annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Trust
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	¹		0.0001	¹		0.0001			0.0018			0.0200
Dividends from net investment income ²		(0.0000	) ³		(0.0001	) ³		(0.0001	)		(0.0018	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.00	%		0.01	%		0.01	%		0.18	%		2.51	%
Ratios to Average Net Assets ⁵
Total expenses		0.45	% ⁶		0.45	% ⁶		0.48	%		0.48	%		0.49	%
Total expenses after fees waived		0.34	% ⁶		0.29	% ⁶		0.31	%		0.40	%		0.46	%
Net investment income		0.00	% ⁶		0.00	% ⁶		0.01	%		0.22	%		2.50	%
Supplemental Data
Net assets, end of year (000)	$	8,215		$	10,640		$	7,776		$	19,713		$	76,334

¹	Amount is less than $0.00005 per share.

²	Dividends are determined in accordance with federal income tax regulations.

³	Amount is greater than $(0.00005) per share.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Prime


	Trust
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	¹		0.0000	¹		0.0001			0.0011			0.0200
Dividends from net investment income ²		(0.0000	) ³		(0.0000	) ³		(0.0001	)		(0.0011	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.00	%		0.00	%		0.01	%		0.11	%		2.49	%
Ratios to Average Net Assets ⁵
Total expenses		0.45	% ⁶		0.45	% ⁶		0.48	%		0.51	%		0.52	%
Total expenses after fees waived		0.32	% ⁶		0.28	% ⁶		0.29	%		0.36	%		0.48	%
Net investment income		0.00	% ⁶		0.01	% ⁶		0.01	%		0.09	%		1.34	%
Supplemental Data
Net assets, end of year (000)	$	21,702		$	29,657		$	37,044		$	96,349		$	3,370

¹	Amount is less than $0.00005 per share.

²	Dividends are determined in accordance with federal income tax regulations.

³	Amount is greater than $(0.00005) per share.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Financial Highlights (continued)

BlackRock Cash Funds: Government


	Trust
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	¹		0.0002			0.0002			0.0008			0.0200
Dividends from net investment income ²		(0.0000	) ³		(0.0002	)		(0.0002	)		(0.0008	)		(0.0200	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.00	%		0.02	%		0.02	%		0.08	%		1.69	%
Ratios to Average Net Assets ⁵
Total expenses		0.62	% ⁶		0.54	% ⁷		0.53	%		0.48	% ⁸		0.47	%
Total expenses after fees waived		0.17	% ⁶		0.10	% ⁷		0.15	%		0.09	%		0.07	%
Net investment income		0.00	% ⁶		0.00	% ⁷		0.03	%		0.08	%		0.16	%
Supplemental Data
Net assets, end of year (000)	$	945		$	1,370		$	3,532		$	13,462		$	12,380

¹	Amount is less than $0.00005 per share.

²	Dividends are determined in accordance with federal income tax regulations.

³	Amount is greater than $(0.00005) per share.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 2010, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.25%.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.18%.

⁸	Ratio revised to reflect exclusion of fees waived.

Financial Highlights (concluded)

BlackRock Cash Funds: Treasury


	Trust
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0000	¹		0.0003			0.0002			0.0007			0.0100
Dividends from net investment income ²		(0.0000	) ³		(0.0003	)		(0.0002	)		(0.0007	)		(0.0100	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ⁴
Based on net asset value		0.00	%		0.03	%		0.02	%		0.08	%		1.45	%
Ratios to Average Net Assets ⁵
Total expenses		0.45	% ⁶		0.45	% ⁷		0.48	%		0.47	%		0.47	%
Total expenses after fees waived		0.15	% ⁶		0.10	% ⁷		0.16	%		0.08	%		0.01	%
Net investment income		0.00	% ⁶		0.00	% ⁷		0.02	%		0.08	%		0.05	%
Supplemental Data
Net assets, end of year (000)	$	15,407		$	23,597		$	12,999		$	55,618		$	94,654

¹	Amount is less than $0.00005 per share.

²	Dividends are determined in accordance with federal income tax regulations.

³	Amount is greater than $(0.00005) per share.

⁴	Where applicable, total investment returns include the reinvestment of dividends and distributions.

⁵	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁶	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

⁷	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.04%.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Funds, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating a share class of a Fund.

Management Fee — a fee paid to BFA for managing a Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

[This page intentionally left blank]

For More Information

Fund and Service Providers

THE FUNDS

BlackRock Funds III

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Government

BlackRock Cash Funds: Treasury

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

Statement of Additional Information

Questions

If you have any questions about the Funds, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of each Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-TRU-0413

APRIL 30, 2013

PROSPECTUS

LOGO

BlackRock Funds III | Aon Captives Shares

^Ø

BlackRock Cash Funds: Institutional

Aon Captives: AOCXX

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Table of Contents


*Fund Overview*	Key facts and details about the Fund, including investment objectives, principal strategies, risk factors, fee and expense information, and historical performance information
	Investment Objective	3
	Principal Investment Strategies of the Fund	3
	Principal Risks of Investing in the Fund	4
	Performance Information	5
	Investment Adviser	6
	Purchase and Sale of Shares	6
	Tax Information	6
	Payments to Broker/Dealers and Other Financial Intermediaries	6

*Details About the Fund*	Details About the Fund’s Investment Strategies	7
	Investment Risks	8

*Account Information*	Shareholder Information	11
	Shareholder Servicing Payments	13
	Calculating the Fund’s Share Price	13
	Fund Distributions	13
	Short-Term Trading Policy	14
	Taxes	14
	Master/Feeder Mutual Fund Structure	15

*Management of the Fund*	Investment Adviser	16
	Administrative Services	16
	Conflicts of Interest	16
	Valuation of Fund Investments	17
	Certain Fund Policies	17

*Financial Highlights*	Financial Performance of the Fund	19

*Glossary*	Glossary of Investment Terms	20



*For More Information*	Fund and Service Providers	Inside Back Cover


		Additional Information			Back Cover

Fund Overview

Key Facts About BlackRock Cash Funds: Institutional

Investment Objective

Fees and Expenses of the Fund

The table below describes the fees and expenses that you may pay if you buy and hold Aon Captives Shares of BlackRock Cash Funds: Institutional.


Annual Class Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ¹	Aon Captives Shares
Management Fee ^1,2		0.10%
Distribution and/or Service (12b-1) Fees		0.10%
Other Expenses		0.05%
Administration Fees		0.05%
Independent Expenses ³		0.00%
Total Annual Class Operating Expenses		0.25%
Fee Waivers and/or Expense Reimbursements ^2,3		(0.03)%
Total Annual Class Operating Expenses After Fee Waivers and/or Expense Reimbursements ^2,3		0.22%

²	BFA, has contractually agreed to waive a portion of its management fee through April 30, 2014. After giving effect to such contractual waiver, the management fee will be 0.07%. The contractual waiver may not be terminated prior to May 1, 2014 without the consent of the Board of Trustees of MIP.

Example:

This Example is intended to help you compare the cost of investing in Aon Captives Shares of the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Aon Captives Shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that Aon Captives Shares’ operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


	1 Year		3 Years		5 Years		10 Years
Aon Captives Shares	$	23	$	77	$	138	$	315

Principal Investment Strategies of the Fund

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry which would subject it to the risks generally associated with investments in the U.S. banking industry ( i.e. , interest rate risk, credit risk and the risk of negative regulatory or market developments affecting the industry).

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

Performance Information

The bar chart and table in this section provide some indication of the risks of investing in Aon Captives Shares of BlackRock Cash Funds: Institutional by showing the changes in the Fund’s performance from year to year. The bar chart shows the return of Aon Captives Shares of the Fund for each of the last ten calendar years. The average annual total return table compares the average annual total return of Aon Captives Shares of the Fund to that of the Money Fund Report (“MFR”) First Tier Institutional Average, a service of iMoneyNet. How the Fund performed in the past is not necessarily an indication of how it will perform in the future. If BFA and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. The Fund is a money market fund managed pursuant to the requirements of Rule 2a-7 under the 1940 Act. Effective May 28, 2010, Rule 2a-7 was amended to impose new liquidity, credit quality and maturity requirements on all money market funds. Fund performance shown prior to May 28, 2010 is based on 1940 Act rules then in effect and is not an indication of future returns.

BlackRock Cash Funds: Institutional

Aon Captives Shares

ANNUAL TOTAL RETURNS

As of 12/31

LOGO

During the periods shown in the bar chart, the highest return for a quarter was 1.33% (quarter ended September 30, 2007 and the lowest return for a quarter was 0.01% (quarter ended September 30, 2011). The year-to-date return as of March 31, 2013 was 0.02%.


As of 12/31/12 Average Annual Total Returns	1 Year			5 Years			10 Years
BlackRock Cash Funds: Institutional — Aon Captives Shares		0.12	%		0.67	%		1.90	%
MFR First Tier Institutional Average		0.07	%		0.63	%		1.76	%

Investment Adviser

Money Market Master Portfolio’s investment adviser is BlackRock Fund Advisors (previously defined as “BFA”).

Purchase and Sale of Shares

The minimum initial investment for Aon Captives Shares of BlackRock Cash Funds: Institutional is $500,000, although the Fund may reduce or waive the minimum in some cases. You may purchase or redeem shares of the Fund each day the bond markets and the Fedwire Funds Service are open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your shares through the Fund, you should contact the Fund by phone at 1-888-204-3956, or by mail to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206.

Tax Information

Payments to Broker/Dealers and Other Financial Intermediaries

Details About the Fund

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of BlackRock Cash Funds: Institutional (the “Fund”), a series of BlackRock Funds III (the “Trust”), and your rights as a shareholder.

Details About the Fund’s Investment Strategies

The Fund is a “feeder” fund that invests all of its assets in a separate “master” portfolio (the “Master Portfolio”) of Master Investment Portfolio (“MIP”), a mutual fund that has an investment objective and strategies substantially identical to those of the Fund. All discussion of the investment objective, strategies and risks of the Fund refers also to the investment objective, strategies and risks of the Master Portfolio, unless otherwise indicated. A description of the relationship of the Fund to the Master Portfolio appears below under the heading “Account Information — Master/Feeder Mutual Fund Structure.”

The Fund is a money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Fund seeks to maintain a net asset value per share (“NAV”) of $1.00.

The Fund will maintain a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. For a discussion of dollar-weighted average maturity and dollar-weighted average life, please see the Glossary on page 20.

Pursuant to Rule 2a-7, the Fund is subject to a “general liquidity requirement” that requires that the Fund hold securities that are sufficiently liquid to meet reasonably foreseeable shareholder redemptions in light of its obligations under Section 22(e) of the 1940 Act regarding share redemptions and any commitments the Fund has made to shareholders. To comply with this general liquidity requirement, BFA must consider factors that could affect the Fund’s liquidity needs, including characteristics of the Fund’s investors and their likely redemptions. Depending upon the volatility of its cash flows (particularly shareholder redemptions), this may require the Fund to maintain greater liquidity than would be required by the daily and weekly minimum liquidity requirements discussed below.

The Fund will not acquire any illiquid security ( i.e ., securities that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the value ascribed to them by the Fund) if, immediately following such purchase, more than 5% of the Fund’s total assets are invested in illiquid securities. The Fund will not acquire any security other than a daily liquid asset unless, immediately following such purchase, at least 10% of its total assets would be invested in daily liquid assets and the Fund will not acquire any security other than a weekly liquid asset unless, immediately following such purchase, at least 30% of its total assets would be invested in weekly liquid assets. For a discussion of daily liquid assets and weekly liquid assets, please see the Glossary on page 20.

The Fund is ordinarily limited to investing so that immediately following any such acquisition not more than 5% of its total assets will be invested in any one issuer’s securities (other than U.S. government obligations, repurchase agreements collateralized by such securities and securities subject to certain guarantees or otherwise providing a right to demand payment) or, in the event that such securities are not First Tier Securities (as defined in Rule 2a-7), not more than ¹ / ₂ of 1% of the Fund’s total assets. In addition, Rule 2a-7 requires that not more than 3% of the Fund’s total assets be invested in Second Tier Securities (as defined in Rule 2a-7) and that Second Tier Securities may only be purchased if they have a remaining maturity of 45 days or less at the time of acquisition.

The investment objective for BlackRock Cash Funds: Institutional is to seek a high level of income consistent with liquidity and the preservation of capital. The Fund seeks to achieve its investment objective by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. Under normal circumstances, the Fund expects to invest at least 95% of its assets in any combination of such investments, which may include certificates of deposit; high-quality debt obligations, such as corporate debt and certain asset-backed securities; certain obligations of U.S. and foreign banks; certain repurchase agreements; and certain obligations of the U.S. government, its agencies and instrumentalities (including government-sponsored enterprises).

The Fund reserves the right to invest 25% or more of its total assets in the obligations of domestic banks. The principal and interest of all securities held by the Fund are payable in U.S. dollars.

Investment Risks

Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. The following is a description of principal risks of investing in the Fund.

Principal Risks of Investing in the Fund

Concentration Risk — The Fund may concentrate its investments in the U.S. banking industry, which means that its performance will be closely tied to the performance of a particular market segment. The Fund’s concentration in these companies may present more risks than if it was broadly diversified over numerous industries and sectors of the economy. A downturn in these companies would have a larger impact on the Fund than on a mutual fund that does not concentrate in such companies. At times, the performance of these companies will lag the performance of other industries or the broader market as a whole.

Credit Risk — Credit risk refers to the possibility that the issuer of a security will not be able to make principal and interest payments when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value.

Income Risk — The Fund’s yield will vary as the short term securities in its portfolio mature and the proceeds are reinvested in securities with different interest rates.

Mortgage- and Asset-Backed Securities Risks — Mortgage-backed securities (residential and commercial) and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Although asset-backed and commercial mortgage-backed securities (“CMBS”) generally experience less prepayment than residential mortgage-backed securities, mortgage-backed and asset-backed securities, like traditional fixed-income securities, are subject to credit, interest rate, prepayment and extension risks.

collected on a pool of mortgages into several revenue streams (“tranches”) with different priority rights to portions of the underlying mortgage payments. Certain CMO tranches may represent a right to receive interest only (“IOs”), principal only (“POs”) or an amount that remains after other floating-rate tranches are paid (an “inverse floater”). These securities are frequently referred to as “mortgage derivatives” and may be extremely sensitive to changes in interest rates. Interest rates on inverse floaters, for example, vary inversely with a short-term floating rate (which may be reset periodically). Interest rates on inverse floaters will decrease when short-term rates increase, and will increase when short-term rates decrease. These securities have the effect of providing a degree of investment leverage. In response to changes in market interest rates or other market conditions, the value of an inverse floater may increase or decrease at a multiple of the increase or decrease in the value of the underlying securities. If the Fund invests in CMO tranches (including CMO tranches issued by government agencies) and interest rates move in a manner not anticipated by Fund management, it is possible that the Fund could lose all or substantially all of its investment.

Prepayment Risk — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. In periods of falling interest rates, the rate of prepayments tends to increase (as does price fluctuation) as borrowers are motivated to pay off debt and refinance at new lower rates. During such periods, reinvestment of the prepayment proceeds by the management team will generally be at lower rates of return than the return on the assets that were prepaid. Prepayment reduces the yield to maturity and the average life of the security.

U.S. Government Obligations Risk — Obligations of U.S. government agencies, authorities, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, not all U.S. government securities are backed by the full faith and credit of the United States. Obligations of certain agencies, authorities, instrumentalities and sponsored enterprises of the U.S. government are backed by the full faith and credit of the United States ( e.g. , the Government National Mortgage Association); other obligations are backed by the right of the issuer to borrow from the U.S. Treasury ( e.g. , the Federal Home Loan Banks) and others are supported by the discretionary authority of the U.S. government to purchase an agency’s obligations. Still others are backed only by the credit of the agency, authority, instrumentality or sponsored enterprise issuing the obligation. No assurance can be given that the U.S. government would provide financial support to any of these entities if it is not obligated to do so by law.

Variable and Floating Rate Instrument Risk — The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.

When-Issued and Delayed Settlement Transactions Risk — When-issued and delayed settlement securities involve the risk that a security the Fund buys will lose value prior to its settlement date. There is also the risk that the security will not be issued or that the other party to the transaction will not meet is obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.

Other Risks of Investing in the Fund

The Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Expense Risk — Fund expenses are subject to a variety of factors, including fluctuations in the Fund’s net assets. Accordingly, actual expenses may be greater or less than those indicated. For example, to the extent that the Fund’s net assets decrease due to market declines or redemptions, the Fund’s expenses will increase as a percentage of Fund net assets. During periods of high market volatility, these increases in the Fund’s expense ratio could be significant.

Liquidity Risk — Liquidity risk refers to the possibility that it may be difficult or impossible to sell certain positions at an acceptable price. The Fund may be unable to pay redemption proceeds within the time period stated in this prospectus because of unusual market conditions, an unusually high volume of redemption requests, or other reasons.

For a description of the Fund’s policies and procedures with respect to disclosure of the Master Portfolio’s portfolio holdings, and a discussion of the Fund’s investments and risks, please refer to the Fund’s Statement of Additional Information (“SAI”).

Account Information

Shareholder Information

Who is Eligible to Invest?

Aon Captives Shares are sold primarily to captive insurance companies administered by Aon Captive Managers, the captive management and risk finance consulting arm of Aon.

The minimum initial investment amount for the Aon Captives Shares of the Fund is $500,000; however, in certain situations, this minimum initial investment amount may be reduced or waived. Please contact your shareholder servicing agent (“Shareholder Servicing Agent”) or the Transfer Agent for more information.

The Fund offers additional share classes with different expenses and expected returns, including share classes you may be eligible to purchase. Call 1-888-204-3956 (toll free) for additional information.

In order to invest, a completed account application form must be submitted to and processed by the Transfer Agent and an account number assigned. You may be asked to provide information to verify your identity when opening an account.

How to Buy Shares

You may purchase Fund shares without paying a sales charge. Your purchase order must be received in proper form, as determined by the Transfer Agent or an intermediary pursuant to an appropriate agreement, by 5:00 p.m. Eastern time on any day the Fund is open (a “Business Day”) (or, if the Fund closes early, at such closing time) to purchase shares at that day’s NAV. Orders received after 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time) will be executed on the next Business Day. The Fund is generally open Monday through Friday and is closed on weekends and generally closed on all other days that the primary markets for the Master Portfolio’s portfolio securities ( i.e. , the bond markets) are closed or the Fedwire Funds Service is closed. The holidays on which both the Fedwire and the bond markets are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Fund is also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (the “NYSE”) closes early, ⁽¹⁾ the Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day.

The Fund reserves the right to suspend or discontinue the offer and sale of its shares and reject or cancel any purchase order for any reason.

Purchases generally must be made in U.S. dollars and funds must be received via the Fedwire Funds Service by its close, or by such other means as the Fund may from time to time determine. You may be charged for any costs incurred in connection with a purchase order that has been placed but for which the Fund has not received full payment.

How to Sell Shares

The Fund generally remits the proceeds from a sale the same Business Day after receiving a properly executed order to sell. The Fund can delay payment for one Business Day. The Fund may postpone and/or suspend redemption and payment beyond one Business Day only as follows: (1) for any period during which there is a non-routine closure of the Federal Reserve wire system or applicable Federal Reserve Banks; (2) for any period (a) during which the NYSE is closed other than customary weekend and holiday closings or (b) during which trading on the NYSE is restricted; (3) for any period during which an emergency exists as a result of which (a) disposal of securities owned by the Fund is not reasonably practicable or (b) it is not reasonably practicable for the Fund to fairly determine the net asset value of shares of the Fund; (4) for any period during which the Securities and Exchange Commission (“SEC”) has, by rule or regulation, deemed that (a) trading shall be restricted or (b) an emergency exists; (5) for any period that the SEC may by order permit for your protection; or (6) for any period during which the Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal

⁽¹⁾	SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

securities laws as discussed in this section below. The Fund reserves the right to redeem your shares automatically and close your account for any reason, subject to applicable law, and send you the proceeds, which would reflect the NAV on the day the Fund automatically redeems your shares. For example, the Fund may redeem your shares automatically to reimburse the Fund for any losses sustained by reason of your failure to make full payment for shares purchased or to collect any charge relating to a transaction effected for your benefit that is applicable to the Fund’s shares, as provided from time to time in this prospectus.

In addition, the Fund reserves the right to send your redemption proceeds in the form of securities from its Master Portfolio.

Upon redemption, the identity of the holder of the account to which the proceeds are being sent may need to be verified.

Special Instructions for Existing Shareholders

An existing shareholder who has established an account with the Fund can add to or redeem from that account by phone or through the mail.

To add or redeem shares by phone, call 1-888-204-3956 between 8:30 a.m. and 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time). The Transfer Agent will employ procedures designed to confirm that your order is valid. These may include asking for identifying information and recording the phone call. Neither the Transfer Agent nor the Fund may be held liable for acting on telephone instructions that the Transfer Agent reasonably believes to be valid. For redemptions, the Transfer Agent will wire proceeds directly to your designated bank account. ⁽¹⁾

To invest by mail, make your check payable to the Fund and mail it to State Street Bank and Trust Company, P.O. Box 5493, Boston, Massachusetts 02206. Please include the Fund’s Share Class number and your account number on your check. You will find the numbers on your monthly statements.

For purchases, you should instruct your bank to wire funds as follows:

State Street Bank and Trust Company

ABA # 011000028

Attn: Transfer Agent

Account # DDA 00330860

For Further Credit to: BlackRock Funds III

Shareholder Account Name:

Shareholder Account Number:

Fund Share Class Number:

1126 (BlackRock Cash Funds: Institutional — Aon Captives Shares)

To redeem shares by mail, indicate the dollar amount you wish to receive or the number of shares you wish to sell in your order to sell. Include the Fund’s Share Class number and your account and taxpayer identification numbers. All account signatories must sign the order.

An existing shareholder can ask the Transfer Agent to wire proceeds directly to its designated bank account. ⁽²⁾

When an existing shareholder purchases Fund shares and then quickly sells ( e.g. , sells before clearance of the purchase check), the Fund may delay the payment of proceeds for up to ten days to ensure that purchase checks have cleared.

⁽¹⁾

⁽²⁾

Distribution Plan

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Aon Captives Shares of the Fund. This Distribution Plan is used to pay for distribution-related services, including ongoing compensation to selling agents, including Aon Benfield Securities, Inc. The fees are paid out of the Aon Captives Shares’ assets on an ongoing basis. Over time, these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. The fees paid under the Distribution Plan are at an annual rate of 0.10% of the average daily net assets of the Aon Captives Shares of the Fund.

Shareholder Servicing Payments

The Fund has adopted a shareholder servicing plan (the “Plan”) that allows the Fund to pay shareholder servicing fees for certain services provided to its shareholders.

The shareholder servicing fees payable pursuant to the Plan are paid to compensate brokers, dealers, financial institutions and industry professionals (including BlackRock, Inc. (“BlackRock”), The PNC Financial Services Group, Inc. (“PNC”), Barclays Bank PLC and their respective affiliates) (each, a “Financial Intermediary”) for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of the Fund’s shares. Because the fees paid by the Fund under the Plan are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment in the Fund and may cost you more than paying other types of sales charges.

In addition to, rather than in lieu of, shareholder servicing fees that the Fund may pay to a Financial Intermediary pursuant to the Plan and fees the Fund pays to the Transfer Agent, BFA, on behalf of the Fund, may enter into non-Plan agreements with a Financial Intermediary pursuant to which the Fund will pay a Financial Intermediary for administrative, networking, recordkeeping, sub-transfer agency and shareholder services. These non-Plan payments are generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a Financial Intermediary or (2) a fixed dollar amount for each account serviced by a Financial Intermediary. The aggregate amount of these payments may be substantial.

From time to time, BFA or its affiliates also may pay a portion of the fees for administrative, networking, recordkeeping, sub-transfer agency and shareholder services described above at its or their own expense and out of its or their legitimate profits. BFA or its affiliates may compensate affiliated and unaffiliated Financial Intermediaries for these other services to the Fund and shareholders. These payments would be in addition to the Fund payments described in this prospectus and may be a fixed dollar amount, may be based on the number of customer accounts maintained by the Financial Intermediary, or may be based on a percentage of the value of shares sold to, or held by, customers of the Financial Intermediary. The aggregate amount of these payments by BFA, and its affiliates may be substantial. Payments by BFA may include amounts that are sometimes referred to as “revenue sharing” payments. In some circumstances, these revenue sharing payments may create an incentive for a Financial Intermediary, its employees or associated persons to recommend or sell shares of the Fund to you. Please contact your Financial Intermediary for details about payments it may receive from the Fund or from BFA or its affiliates. For more information, see the Fund’s SAI.

Calculating the Fund’s Share Price

The Fund’s share price (also known as the Fund’s NAV) is calculated by dividing the value of the net assets of the Fund ( i.e. , the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

The Fund’s NAV is calculated at 5:00 p.m. Eastern time on any Business Day (or, if the Fund closes early, at such closing time). The NAV of the Fund is calculated based on the net asset value of the Master Portfolio in which the Fund invests. The Fund’s SAI includes a description of the methods for valuing the Master Portfolio’s investments.

The Fund seeks to maintain a constant NAV per share of $1.00, although it can offer no assurance that it will be able to do so.

Fund Distributions

The Fund declares distributions of its net investment income daily and distributes them monthly to shareholders. The Fund distributes its net realized capital gains, if any, to shareholders at least annually. Distributions payable to you by the Fund will be automatically reinvested in additional shares of the Fund unless you have elected to receive distribution payments in cash.

You begin earning distributions on your shares the day your purchase order takes effect. You continue earning daily distributions on your shares up to but not including the date you sell them.

The Fund credits distributions earned on weekends and holidays to the preceding Business Day. If you sell shares before the monthly distribution payment date, the Fund remits any distributions declared but not yet paid on the next distribution payment date. If you sell all shares before the monthly distribution payment date, the Fund remits all distributions accrued with the sale proceeds.

Short-Term Trading Policy

Market timing is an investment technique involving frequent short-term trading of mutual fund shares designed to exploit market movements or inefficiencies in the way a mutual fund prices its shares. The Boards of Trustees of the Trust and MIP have evaluated the risks of market timing activities by the Fund’s shareholders and have determined that due to (i) the Fund’s policy of seeking to maintain the Fund’s NAV per share at $1.00 each day, (ii) the nature of the Fund’s portfolio holdings and (iii) the nature of the Fund’s shareholders, it is unlikely that (a) market timing would be attempted by the Fund’s shareholders or (b) any attempts to market time the Fund by shareholders would result in a negative impact to the Fund or its shareholders. As a result, the Boards of Trustees of the Trust and MIP have not adopted policies and procedures to deter short-term trading in the Fund. There can be no assurances, however, that the Fund may not, on occasion, serve as a temporary or short-term investment vehicle for those who seek to market time funds offered by other investment companies.

Taxes

The following discussion regarding U.S. federal income taxes is based upon laws in effect as of the date of this prospectus and summarizes only some of the important U.S. federal income tax considerations affecting the Fund and its U.S. shareholders. This discussion is not intended as a substitute for careful tax planning. Please see the Fund’s SAI for additional U.S. federal income tax information.

Distributions from the Fund’s net investment income and net realized capital gains are taxable, whether you choose to receive them in cash or automatically reinvest them in additional Fund shares. The amount of taxes you owe will vary depending on your tax status and based on the amount and character of the Fund’s distributions to you and your tax rate.

Distributions from the Fund generally are taxable as follows:



Distribution Type		Tax Status
Income		Ordinary income ⁽¹⁾
Short-term capital gain		Ordinary income
Long-term capital gain		Long-term capital gain ⁽²⁾

⁽¹⁾

Distributions from the Fund paid to corporate shareholders will not qualify for the dividends-received deduction generally available to corporate taxpayers. Since the Fund’s income is derived from sources that do not pay “qualified dividend income,” income distributions from the net investment income of the Fund generally will not qualify for taxation at the maximum 20% U.S. federal income tax rate available to individuals on qualified dividend income.

⁽²⁾	Normally, the Fund does not expect to realize or distribute a significant amount of long-term capital gains (if any).

Provided the Fund is able to maintain a constant NAV per share of $1.00, sales of the Fund’s shares generally will not result in taxable gain or loss. After the end of each year, the Fund will send to you a notice that tells you how much you have received in distributions during the year and their U.S. federal income tax status. You could also be subject to foreign, state and local taxes on such distributions.

In certain circumstances, you may be subject to back-up withholding taxes on distributions to you from the Fund if you fail to provide the Fund with your correct social security number or other taxpayer identification number, or to make required certifications, or if you have been notified by the U.S. Internal Revenue Service (“IRS”) that you are subject to back-up withholding.

A 30% withholding tax on dividends paid after December 31, 2013 and redemption proceeds paid after December 31, 2016 will be imposed on (i) certain foreign financial institutions and investment Funds, unless they agree to collect and disclose to the IRS information regarding their direct and indirect U.S. account holders and (ii) certain other foreign entities unless they certify certain information regarding their direct and indirect U.S. owners. Under some circumstances, a foreign shareholder may be eligible for refunds or credits of such taxes.

Tax considerations for tax-exempt or foreign investors or those holding fund shares through a tax-deferred account, such as a 401(k) plan or Individual Retirement Account, will be different. For example, shareholders that are

exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Internal Revenue Code generally are not subject to U.S. federal income tax on Fund dividends or distributions or on sales of Fund shares. Because each investor’s tax circumstances are unique and because tax laws are subject to change, you should consult your tax adviser about your investment.

Master/Feeder Mutual Fund Structure

The Fund does not have its own investment adviser. Instead, the Fund invests all of its assets in the Master Portfolio, which has an investment objective, strategies and policies substantially identical to those of the Fund. BFA serves as investment adviser to the Master Portfolio. The Master Portfolio may accept investments from other feeder funds. Certain actions involving other feeder funds, such as a substantial withdrawal, could affect the Master Portfolio and, therefore, the Fund.

Feeder Fund Expenses

Feeder funds, including the Fund, bear the master portfolio’s expenses in proportion to the amount of assets each invests in the master portfolio. The feeder fund can set its own transaction minimums, fund-specific expenses and conditions.

Feeder Fund Rights

Under the master/feeder structure, the Trust’s Board of Trustees retains the right to withdraw the Fund’s assets from the Master Portfolio if it believes doing so is in the best interests of the Fund’s shareholders. If the Trust’s Board of Trustees decides to withdraw the Fund’s assets, it would then consider whether the Fund should hire its own investment adviser, invest in another master portfolio or take other action.

Management of the Fund

Investment Adviser

The Fund is a “feeder” fund that invests all of its assets in the Master Portfolio, which has an investment objective, strategies and policies substantially identical to those of the Fund. BFA, a registered investment adviser, serves as investment adviser to the Master Portfolio. BFA manages the investment of the Master Portfolio’s assets and provides the Master Portfolio with investment guidance and policy direction in connection with daily portfolio management, subject to the supervision of MIP’s Board of Trustees. For its services to the Master Portfolio, BFA is entitled to receive a management fee at the annual rate of 0.10% of the Master Portfolio’s average daily net assets. BFA has contractually agreed to waive 0.03% of its management fee through April 30, 2014. BFA and BAL, the Fund’s administrator, have voluntarily agreed to waive a portion of their respective fees and/or reimburse operating expenses to enable the Fund and Master Portfolio to maintain minimum levels of daily net investment income. BFA and BAL may discontinue this waiver and/or reimbursement at any time without notice.

A discussion regarding the basis for MIP’s Board of Trustees’ approval of the investment advisory agreement with BFA is available in the Fund’s semi-annual report for the period ended June 30, 2012.

Administrative Services

BAL provides the following services, among others, as the Fund’s administrator:

Supervises the Fund’s administrative operations;

Provides or causes to be provided management reporting and treasury administration services;

Financial reporting;

Legal, blue sky and tax services;

Preparation of proxy statements and shareholder reports; and

Engaging and supervising the shareholder servicing agents on behalf of the Fund.

BAL is entitled to receive a fee for these services at the annual rate of 0.05% of the average daily net assets of the Aon Captives Shares of the Fund. In addition to performing these services, BAL has agreed to bear all costs of operating the Fund, other than brokerage expenses, management fees, 12b-1 distribution or service fees, certain fees and expenses related to the Trust’s trustees who are not “interested persons” of the Fund or the Trust as defined in the 1940 Act and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses. No additional administration fees are charged at the Master Portfolio level.

Conflicts of Interest

The investment activities of BFA and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)) in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Fund and its shareholders. BFA and its Affiliates provide investment management services to other funds and discretionary managed accounts that follow investment programs similar to those of the Fund. BFA and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Fund. One or more Affiliates act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests, in securities, currencies and other instruments in which the Fund directly and indirectly invests. Thus, it is likely that the Fund will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Fund and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Fund. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by

the Fund and may result in an Affiliate having positions that are adverse to those of the Fund. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Fund. As a result, an Affiliate may compete with the Fund for appropriate investment opportunities. The results of the Fund’s investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Fund could sustain losses during periods in which one or more Affiliates and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Fund may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate-advised clients may adversely impact the Fund. Transactions by one or more Affiliate-advised clients or BFA may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Fund. The Fund’s activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Fund may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Fund also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Fund or who engage in transactions with or for the Fund, and may receive compensation for such services. The Fund may also make brokerage and other payments to Affiliates in connection with the Fund’s portfolio investment transactions.

The activities of Affiliates may give rise to other conflicts of interest that could disadvantage the Fund and its shareholders. BFA has adopted policies and procedures designed to address these potential conflicts of interest.

Valuation of Fund Investments

The Fund’s share price (also known as the Fund’s NAV) is calculated by dividing the value of the net assets of the Fund ( i.e ., the value of its total assets less total liabilities) by the total number of outstanding shares of the Fund, generally rounded to the nearest cent.

The Fund’s NAV is calculated at 5:00 p.m. Eastern Time on any Business Day (or, if the Fund closes early, at such closing time). The NAV of the Fund is calculated based on the net asset value of the Master Portfolio in which the Fund invests. The amortized cost method is used in calculating the Master Portfolio’s net asset value, meaning that the calculation is based on a valuation of the assets held by the Master Portfolio at cost, with an adjustment for any discount or premium on a security at the time of purchase. The Fund’s SAI includes more information about the methods for valuing the Master Portfolio’s investments.

The Fund seeks to maintain a constant NAV per share of $1.00, although it can offer no assurance that it will be able to do so.

Certain Fund Policies

Anti-Money Laundering Requirements

The Fund is subject to the USA PATRIOT Act (the “Patriot Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the Fund may request information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of financial professionals; it will be used only for compliance with the requirements of the Patriot Act.

The Fund reserves the right to reject purchase orders from persons who have not submitted information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to redeem any amounts in the Fund from persons whose identity it is unable to verify on a timely basis. It is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.

BlackRock Privacy Principles

other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

Financial Highlights

The financial highlights table is intended to help investors understand the financial performance of Aon Captives Shares of the Fund for the past five years. Certain information reflects financial results for a single Aon Captives Share of the Fund. The total returns in the table represent the rate of return that an investor would have earned (or lost) on an investment in Aon Captives Shares of the Fund, assuming reinvestment of all dividends and/or distributions. The information has been audited by PricewaterhouseCoopers LLP, whose report, along with the Fund’s financial statements, is included in the Fund’s annual report. You may obtain copies of the annual report, at no cost, by calling 1-888-204-3956 (toll-free) from 8:30 a.m. to 5:30 p.m. Eastern time on any business day.

BlackRock Cash Funds: Institutional


	Aon Captives
	Year Ended December 31,
	2012			2011			2010			2009			2008
Per Share Operating Performance
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0012			0.0008			0.0012			0.0033			0.0300
Dividends from net investment income ¹		(0.0012	)		(0.0008	)		(0.0012	)		(0.0033	)		(0.0300	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Investment Return ²
Based on net asset value		0.12	%		0.08	%		0.12	%		0.33	%		2.74	%
Ratios to Average Net Assets ³
Total expenses		0.22	% ⁴		0.22	% ⁴		0.25	%		0.25	%		0.26	%
Total expenses after fees waived		0.22	% ⁴		0.22	% ⁴		0.22	%		0.22	%		0.23	%
Net investment income		0.12	% ⁴		0.07	% ⁴		0.11	%		0.35	%		2.67	%
Supplemental Data
Net assets, end of year (000)	$	11,003		$	9,167		$	59,237		$	72,949		$	97,273

¹	Dividends are determined in accordance with federal income tax regulations.

²	Where applicable, total investment returns include the reinvestment of dividends and distributions.

³	Includes the Fund’s share of the Master Portfolio’s allocated net expenses and/or net investment income, except the total expenses for the three years ended December 31, 2010, which include gross expenses.

⁴	Includes the Fund’s share of the Master Portfolio’s allocated fees waived of 0.03%.

Glossary

This glossary contains an explanation of some of the common terms used in this prospectus. For additional information about the Fund, please see the SAI.

Annual Class Operating Expenses — expenses that cover the costs of operating the share class of the Fund.

Distribution Fees — fees used to support the Fund’s marketing and distribution efforts, such as compensating financial professionals and other financial intermediaries, advertising and promotion.

Dollar-Weighted Average Life — the dollar-weighted average maturity of the Fund’s portfolio calculated without reference to the exceptions used for variable or floating rate securities regarding the use of the interest rate reset dates in lieu of the security’s actual maturity date. “Dollar-weighted” means the larger the dollar value of a debt security in the Fund, the more weight it gets in calculating this average.

Dollar-Weighted Average Maturity — the average maturity of the Fund is the average amount of time until the organizations that issued the debt securities in the Fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of a debt security in the Fund, the more weight it gets in calculating this average. To calculate the dollar-weighted average maturity, the Fund may treat a variable or floating rate security as having a maturity equal to the time remaining to the security’s next interest rate reset date rather than the security’s actual maturity.

Management Fee — a fee paid to BFA for managing the Master Portfolio.

Other Expenses — include accounting, administration, transfer agency, custody, professional and registration fees.

Shareholder Servicing Fees — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

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For More Information

Fund and Service Providers

THE FUND

BlackRock Funds III

BlackRock Cash Funds: Institutional

400 Howard Street

San Francisco, California 94105

1-888-204-3956

MANAGER

BlackRock Fund Advisors

400 Howard Street

San Francisco, California 94105

TRANSFER AGENT

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

300 Madison Avenue

New York, New York 10017

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

CUSTODIAN

State Street Bank and Trust Company

100 Summer Street

Boston, Massachusetts 02110

COUNSEL

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019-6018

Additional Information

Annual/Semi-Annual Reports

These reports contain additional information about the Fund’s investments. The annual report describes the Fund’s performance, lists portfolio holdings, and discusses recent market conditions, economic trends and Fund investment strategies that significantly affected the Fund’s performance for the last fiscal year.

Statement of Additional Information

A Statement of Additional Information (“SAI”), dated April 30, 2013, has been filed with the Securities and Exchange Commission (“SEC”). The SAI, which includes additional information about the Fund, may be obtained free of charge, along with the Fund’s annual and semi-annual reports, by calling 1-888-204-3956 on any business day. The SAI, as supplemented from time to time, is incorporated by reference into this prospectus.

Questions

If you have any questions about the Fund, please call: 1-888-204-3956 (toll-free) 8:30 a.m. to 5:30 p.m. (Eastern time) on any business day.

World Wide Web

Written Correspondence

State Street Corporation

Institutional Transfer Agency

P.O. Box 5493

Boston, Massachusetts 02206

Overnight Mail

State Street Corporation

Institutional Transfer Agency

Mailstop 1651

200 Clarendon Street

Boston, Massachusetts 02116

Portfolio Characteristics and Holdings

A description of the Fund’s policies and procedures related to disclosure of portfolio characteristics and holdings is available in the SAI.

For information about portfolio holdings and characteristics, BlackRock fund shareholders and prospective investors may call 1-888-204-3956.

Securities and Exchange Commission

You may also view and copy public information about the Fund, including the SAI, by visiting the EDGAR database on the SEC’s website (http://www.sec.gov) or the SEC’s Public Reference Room in Washington, D.C. Copies of this information can be obtained, for a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing to the Public Reference Room of the SEC, Washington, D.C. 20549. Information about obtaining documents on the SEC’s website without charge can be obtained by calling the SEC directly at (800) SEC-0330.

You should rely only on the information contained in this prospectus. No one is authorized to provide you with information that is different from information contained in this prospectus.

The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE # 811-07332


PRO-CF-AON-0413

STATEMENT OF ADDITIONAL INFORMATION

B LACK R OCK F UNDS III

B LACK R OCK C ASH F UNDS : I NSTITUTIONAL

B LACK R OCK C ASH F UNDS : P RIME

B LACK R OCK C ASH F UNDS : G OVERNMENT

B LACK R OCK C ASH F UNDS : T REASURY

Dated April 30, 2013


Fund		Ticker

BLACKROCK CASH FUNDS: INSTITUTIONAL

Aon Captives Shares		AOCXX

Capital Shares		BCIXX

Institutional Shares		BGIXX

Premium Shares		BSSXX

Select Shares		BGLXX

Trust Shares		BGTXX

BLACKROCK CASH FUNDS: PRIME

Capital Shares		BCPXX

Institutional Shares		BPIXX

Premium Shares		BPSXX

Select Shares		BPLXX

Trust Shares		BPEXX

BLACKROCK CASH FUNDS: GOVERNMENT

Institutional Shares		BVIXX

Select Shares		BVSXX

Trust Shares		BVTXX

BLACKROCK CASH FUNDS: TREASURY

Capital Shares		BCYXX

Institutional Shares		BRIXX

Premium Shares		BSPXX

Select Shares		BRSXX

Trust Shares		BYTXX

BlackRock Funds III (the “Trust”) is an open-end, series management investment company. This combined Statement of Additional Information (“SAI”) contains additional information about Premium, Capital, Institutional, Select and Trust Shares of the following series of the Trust — BlackRock Cash Funds: Prime, BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Treasury and Institutional, Select and Trust Shares of BlackRock Cash Funds: Government (each, a “Fund” and collectively, the “Funds”). This SAI also contains information about Aon Captives Shares of BlackRock Cash Funds: Institutional.

Treasury invests in Treasury Money Market Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”). MIP is an open-end, series management investment company. BlackRock Fund Advisors (“BFA” or the “Investment Adviser”) serves as investment adviser to each Master Portfolio. References to the investments, investment policies and risks of a Fund, unless otherwise indicated, should be understood to include references to the investments, investment policies and risks of such Fund’s Master Portfolio.

This SAI is not a prospectus and should be read in conjunction with the current prospectuses for Premium, Capital, Institutional, Select and Trust Shares of the Funds, and Aon Captives Shares of BlackRock Cash Funds: Institutional, each dated April 30, 2013 (each, a “Prospectus” and collectively, the “Prospectuses”), and as amended from time to time. All terms used in this SAI that are defined in the Prospectuses have the meanings assigned in the Prospectuses. The audited financial statements for the Funds, which include the schedules of investments and report of the independent registered public accounting firm for the fiscal year ended December 31, 2012, are hereby incorporated by reference to the Funds’ annual reports, semi-annual reports and Prospectuses for Capital, Premium, Institutional, Select and Trust Shares of the Funds, and Aon Captives Shares of BlackRock Cash Funds: Institutional. Copies of the Prospectuses, annual reports and semi-annual reports may be obtained without charge by writing to State Street Corporation, Institutional Transfer Agency, P.O. Box 5493, Boston, Massachusetts 02206, or by calling 1-888-204-3956 (toll-free).

References to the Investment Company Act of 1940, as amended (the “1940 Act”), or other applicable law, will include any rules promulgated thereunder and any guidance, interpretations or modifications by the Securities and Exchange Commission (the “SEC”), SEC staff or other authority with appropriate jurisdiction, including court interpretations, and exemptive, no-action or other relief or permission from the SEC, SEC staff or other authority.

TABLE OF CONTENTS


	Page

History of the Trust		1

Description of the Funds and their Investments and Risks		1

Investment Objectives and Policies		1

Master/Feeder Structure		1

Investment Restrictions		2

Fundamental Investment Restrictions of the Funds		2

Non-Fundamental Investment Restrictions of the Funds		4

Investments and Risks		5

Asset-Backed and Commercial Mortgage-Backed Securities		5

Bank Obligations		5

Commercial Paper and Short-Term Corporate Debt Instruments		6

Asset-Backed Commercial Paper		7

Floating-Rate and Variable-Rate Obligations		7

Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions		7

Funding Agreements		7

Illiquid Securities		8

Investment Company Securities		8

Letters of Credit		8

Loans of Portfolio Securities		8

Loan Participation Agreements		9

Medium-Term Notes		9

Mortgage Pass-Through Securities		9

Mortgage Securities		11

Municipal Securities		11

Non-U.S. Obligations		12

Participation Interests		12

Regulation Regarding Derivatives		12

Repurchase Agreements		12

Restricted Securities		13

Unrated Investments		13

U.S. Government Obligations		13

U.S. Treasury Obligations		14

Disclosure of Portfolio Holdings		14

Management		17

Share Ownership Information		25

Ownership of Securities of Certain Entities		25


	Page

Compensation of Trustees		26

Codes of Ethics		27

Proxy Voting Policies of the Master Portfolios		27

Shareholder Communication to the Board of Trustees		27

Potential Conflicts of Interest		27

Control Persons and Principal Holders of Securities		34

Investment Adviser and Other Service Providers		36

Investment Adviser		36

Advisory Fees		36

Administrator		37

Distributor		39

BlackRock Cash Funds: Institutional — Aon Captives Shares Distribution Plan		39

Shareholder Servicing Agents		40

Non-Plan Payments		41

Other Distribution Arrangements		42

Custodian		42

Transfer and Dividend Disbursing Agent		42

Independent Registered Public Accounting Firm		43

Determination of Net Asset Value		43

Purchase, Redemption and Pricing of Shares		43

Terms of Purchase and Redemption		43

In-Kind Purchases		44

Suspension of Redemption Rights or Payment of Redemption Proceeds		44

Declaration of Trust Provisions Regarding Redemptions at Option of Trust		45

Portfolio Transactions		45

General		45

Portfolio Turnover		46

Securities of Regular Broker-Dealers		46

Distributions and Taxes		46

Qualification as a Regulated Investment Company		47

Excise Tax		48

Capital Loss Carry-Forwards		48

Investment Through the Master Portfolios		49

Taxation of Fund Investments		49

Taxation of Distributions		50

Sales of Fund Shares		51

Foreign Taxes		51

Federal Income Tax Rates		51


	Page

Back-Up Withholding		51

Tax-Deferred Plans		52

Foreign Shareholders		52

Recent Legislation		53

Capital Stock		53

Voting		53

Dividends and Distributions		54

Master Portfolios		54

Additional Information on the Funds		54

Financial Statements		54

Appendix A		A-1

iii

History of the Trust

BlackRock Funds III (the “Trust”) was organized on December 4, 2001 as a statutory trust under the laws of the State of Delaware under the name Barclays Global Investors Funds. The Trust was originally organized as a Maryland corporation named Barclays Global Investors Funds, Inc. (the “Maryland corporation”). On August 21, 2001, the Board of Directors of the Maryland corporation approved a proposal to redomicile the Maryland corporation in Delaware as a Delaware statutory trust (the “Redomiciling”). Shareholders of the Maryland corporation approved the Redomiciling on November 16, 2001. The Trust was established with multiple series corresponding to, and having identical designations as, the series of the Maryland corporation. The Redomiciling was effected on January 11, 2002, at which time the Trust assumed the operations of the Maryland corporation and adopted the Maryland corporation’s registration statement. Shortly thereafter, the Maryland corporation was dissolved.

On December 1, 2009, the Trust was renamed BlackRock Funds III and certain of its series were also renamed. Prime Money Market Fund was renamed BlackRock Cash Funds: Prime. Institutional Money Market Fund was renamed BlackRock Cash Funds: Institutional. Government Money Market Fund was renamed BlackRock Cash Funds: Government. Treasury Money Market Fund was renamed BlackRock Cash Funds: Treasury.

The Trust consists of multiple series, including BlackRock Cash Funds: Prime, BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each, a “Fund” and collectively, the “Funds”). Each Fund issues shares in multiple classes, currently including SL Agency, Premium, Capital, Institutional, Select and Trust Shares, and with respect only to BlackRock Cash Funds: Institutional, Aon Captives Shares. SL Agency Shares are discussed in a separate Statement of Additional Information. On August 14, 2002, the Trust’s board of trustees (the “Board of Trustees” or the “Board”) approved changing the name of BlackRock Cash Funds: Institutional Distributor Shares to the “Aon Captives Shares.”

On April 30, 2010, Capital and Premium Shares of BlackRock Cash Funds: Government were closed.

Each Fund invests all of its assets in a master portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”) of Master Investment Portfolio (“MIP”) (as shown below), which has substantially the same investment objective, policies and restrictions as the related Fund.


Fund		Master Portfolio in Which the Fund Invests
BlackRock Cash Funds: Prime		Prime Money Market Master Portfolio

BlackRock Cash Funds: Institutional		Money Market Master Portfolio

BlackRock Cash Funds: Government		Government Money Market Master Portfolio

BlackRock Cash Funds: Treasury		Treasury Money Market Master Portfolio

The Trust’s principal office is located at 400 Howard Street, San Francisco, California 94105.

Description of the Funds and their Investments and Risks

Investment Objectives and Policies. The Trust is an open-end, series management investment company.

The Funds and the Master Portfolios in which they invest are diversified funds as defined in the 1940 Act. Each Fund’s investment objective is set forth in its Prospectuses. Each Fund’s investment objective is non-fundamental and can be changed by the Trust’s Board of Trustees without shareholder approval. The investment objective and investment policies of a Fund determine the types of portfolio securities in which the Fund invests, the degree of risk to which the Fund is subject and, ultimately, the Fund’s performance. There can be no assurance that the investment objective of any Fund will be achieved.

Master Portfolio. However, if a mutual fund or other investor redeems its interests from a Master Portfolio, the economic efficiencies ( e.g. , spreading fixed expenses over a larger asset base) that the Trust’s Board of Trustees believes may be available through a Fund’s investment in such Master Portfolio may not be fully achieved. In addition, although unlikely, the master/feeder structure may give rise to accounting or operational difficulties.

The fundamental policies of each Master Portfolio cannot be changed without approval by the holders of a majority (as defined in the 1940 Act) of a Master Portfolio’s outstanding interests. Whenever a Fund, as an interestholder of a Master Portfolio, is requested to vote on any matter submitted to interestholders of the Master Portfolio, a Fund will either hold a meeting of its shareholders to consider such matters and cast its votes in proportion to the votes received from its shareholders (shares for which a Fund receives no voting instructions will be voted in the same proportion as the votes received from the other Fund shareholders) or cast its votes, as an interestholder of the Master Portfolio, in proportion to the votes received by the Master Portfolio from all other interestholders of the Master Portfolio.

Certain policies of the Master Portfolios that are non-fundamental may be changed by vote of a majority of MIP’s Trustees without interestholder approval. If a Master Portfolio’s investment objective or fundamental or non-fundamental policies are changed, a Fund may elect to change its objective or policies to correspond to those of the related Master Portfolio. Each Fund may redeem its interests from its Master Portfolio only if the Trust’s Board of Trustees determines that such action is in the best interests of the Fund and its shareholders, for this or any other reason. Prior to such redemption, the Trust’s Board of Trustees would consider alternatives, including whether to seek a new investment company with a matching investment objective in which to invest or retain its own investment adviser to manage the Fund’s portfolio in accordance with its investment objective. In the latter case, a Fund’s inability to find a substitute investment company in which to invest or equivalent management services could adversely affect shareholders’ investments in the Fund.

Investment Restrictions

Fundamental Investment Restrictions of the Funds. The Funds are subject to the following investment restrictions, all of which are fundamental policies. Each Fund may not:

(1) Purchase the securities of issuers conducting their principal business activity in the same industry if, immediately after the purchase and as a result thereof, the value of the Fund’s investments in that industry would equal or exceed 25% of the current value of the Fund’s total assets, provided that this restriction does not limit the Fund’s: (i) investments in securities of other investment companies, (ii) investments in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, or (iii) investments in repurchase agreements collateralized by U.S. government securities; and further provided that, with respect to BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional, the Fund reserves the right to concentrate in the obligations of domestic banks (as such term is interpreted by the Securities and Exchange Commission (“SEC”) or its staff);

(2) Purchase the securities of any single issuer if, as a result, with respect to 75% of the Fund’s total assets, more than 5% of the value of its total assets would be invested in the securities of such issuer or the Fund’s ownership would be more than 10% of the outstanding voting securities of such issuer, provided that this restriction does not limit the Fund’s cash or cash items, investments in U.S. government securities, or investments in securities of other investment companies;

(3) Borrow money or issue senior securities, except to the extent permitted under the 1940 Act, including the rules, regulations and any orders obtained thereunder;

(4) Make loans to other parties, except to the extent permitted under the 1940 Act, including the rules, regulations and any orders obtained thereunder. For the purposes of this limitation, entering into repurchase agreements, lending securities and acquiring any debt securities are not deemed to be the making of loans;

in accordance with the Fund’s investment program may be deemed to be an underwriting; and provided further, that the purchase by the Fund of securities issued by an open-end management investment company, or a series thereof, with substantially the same investment objective, policies and restrictions as the Fund shall not constitute an underwriting for purposes of this paragraph;

(6) Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); and

(7) Purchase or sell commodities, provided that: (i) currency will not be deemed to be a commodity for purposes of this restriction, (ii) this restriction does not limit the purchase or sale of futures contracts, forward contracts or options, and (iii) this restriction does not limit the purchase or sale of securities or other instruments backed by commodities or the purchase or sale of commodities acquired as a result of ownership of securities or other instruments.

With respect to the fundamental policy relating to concentration set forth in paragraph (1) above, the 1940 Act does not define what constitutes “concentration” in an industry and it is possible that interpretations of concentration could change in the future. Accordingly, the policy in paragraph (1) above will be interpreted to refer to concentration as that term may be interpreted from time to time. In this respect, and in accordance with SEC staff interpretations, the ability of BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional to concentrate in the obligations of domestic banks means that these Funds are permitted to invest, without limit, in bankers’ acceptances, certificates of deposit and other short-term obligations issued by (a) U.S. banks, (b) U.S. branches of foreign banks (in circumstances in which the U.S. branches of foreign banks are subject to the same regulation as U.S. banks), and (c) foreign branches of U.S. banks (in circumstances in which the Funds will have recourse to the U.S. bank for the obligations of the foreign branch).

The Trust has delegated to BlackRock Fund Advisors (“BFA” or the “Investment Adviser”), an affiliate of BlackRock, Inc. (together with its affiliates, “BlackRock”), the ability to determine the methodology used by the Master Portfolios to classify issuers by industry. BFA defines industries and classifies each issuer according to the industry in which the issuer conducts its principal business activity pursuant to its proprietary industry classification system. In classifying companies by industry, BFA may draw on its credit, research and investment resources and those of BlackRock Institutional Trust Company, N.A. (“BTC”) or its other affiliates, and BFA may (but need not) consider classifications by third-party industry classification systems. BFA believes that its system is reasonably designed so that issuers with primary economic characteristics that are materially the same are classified in the same industry. For example, asset-backed commercial paper may be classified in an industry based on the nature of the assets backing the commercial paper, and foreign banks may be classified in an industry based on the region in which they do business if BFA has determined that the foreign banks within that industry have primary economic characteristics that are materially the same.

A fund that invests a significant percentage of its total assets in a single industry may be particularly susceptible to adverse events affecting that industry and may be more risky than a fund that does not concentrate in an industry. To the extent BFA’s classification system results in broad categories, concentration risk may be decreased. On the other hand, to the extent it results in narrow categories, concentration risk may be increased.

With respect to paragraph (3) above, the 1940 Act currently allows each Fund to borrow up to one-third of the value of its total assets (including the amount borrowed) valued at the lesser of cost or market, less liabilities (not including the amount borrowed) at the time the borrowing is made. With respect to paragraph (4) above, the 1940 Act and regulatory interpretations currently limit the percentage of each Fund’s securities that may be loaned to one-third of the value of its total assets.

Non-Fundamental Investment Restrictions of the Funds. The Funds have adopted the following investment restrictions as non-fundamental policies. These restrictions may be changed without shareholder approval by a majority of the Trustees of the Trust at any time.

(1) Each Fund may invest in shares of other open-end management investment companies, subject to the limitations of Section 12(d)(1) of the 1940 Act, including the rules, regulations and exemptive orders obtained thereunder;

(2) Each Fund may not invest more than 5% of its net assets in illiquid securities. For this purpose, illiquid securities include, among others, (i) securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale, (ii) fixed time deposits that are subject to withdrawal penalties and that have maturities of more than seven days, and (iii) repurchase agreements not terminable within seven days;

(3) Each Fund may lend securities from its portfolio to brokers, dealers and financial institutions, in amounts not to exceed (in the aggregate) one-third of a Fund’s total assets. Any such loans of portfolio securities will be fully collateralized based on values that are marked-to-market daily; and

(4) Each Fund may not make investments for the purpose of exercising control or management; provided that a Fund may invest all of its assets in a diversified, open-end management investment company, or a series thereof, with substantially the same investment objective, policies and restrictions as the Fund, without regard to the limitations set forth in this paragraph.

BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury have adopted the following investment restriction as an additional non-fundamental policy:

Each Fund will provide shareholders with at least 60 days’ notice of any change to the Fund’s non-fundamental policy to invest at least 80% of the Fund’s assets in the types of securities described in the Fund’s principal investment strategies. The notice will be provided in plain English in a separate written document, and will contain the following prominent statement or similar statement in bold-face type: “Important Notice Regarding Change in Investment Policy.” This statement will appear on both the notice and the envelope in which it is delivered, unless it is delivered separately from other communications to investors, in which case the statement will appear either on the notice or the envelope in which the notice is delivered.

BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional have adopted the following investment restrictions as additional non-fundamental policies:

(1) Each Fund may not purchase interests, leases, or limited partnership interests in oil, gas, or other mineral exploration or development programs.

(2) Each Fund may not write, purchase or sell puts, calls, straddles, spreads, warrants, options or any combination thereof, except that the Fund may purchase securities with put rights in order to maintain liquidity.

(3) Each Fund may not purchase securities on margin (except for short-term credits necessary for the clearance of transactions) or make short sales of securities.

Notwithstanding any other investment policy or restriction (whether or not fundamental), each Fund may (and does) invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies and limitations as the Fund.

The fundamental and non-fundamental investment restrictions for each Master Portfolio are identical to the corresponding investment restrictions described above for the Fund that invests in such Master Portfolio, except that, in the case of the Government and Treasury Money Market Master Portfolios, industry concentration restriction (1), proviso (iii) does not limit investments in repurchase agreements collateralized by securities issued or guaranteed by the U.S., its agencies or instrumentalities.

Investment Risks

To the extent set forth in this SAI, each Fund, through its investment in the corresponding Master Portfolio, may invest in the securities described below. To avoid the need to refer to both the Funds and the Master Portfolios in every instance, the following sections generally refer to the Funds only.

The assets of each Fund consist only of obligations maturing within 397 calendar days from the date of acquisition (as determined in accordance with the regulations of the SEC). The dollar-weighted average maturity of a Fund may not exceed 60 days and the dollar-weighted average life of a Fund may not exceed 120 days. The securities in which each Fund invests may not yield as high a level of current income as may be achieved from securities with less liquidity and less safety. There can be no assurance that a Fund’s investment objective will be realized as described in its Prospectuses.

Under normal circumstances, BlackRock Cash Funds: Treasury invests at least 80% of its assets in U.S. Treasury obligations, repurchase agreements with regard to U.S. Treasury obligations and/or other money market funds that have substantially the same investment objective and strategies as the Fund. Under normal circumstances, BlackRock Cash Funds: Government invests at least 80% of its assets in certain obligations of the U.S. government, its agencies and instrumentalities, repurchase agreements with regard to such obligations and/or other money market funds that have substantially the same investment objective and strategies as the Fund. BlackRock Cash Funds: Treasury and BlackRock Cash Funds: Government may each invest up to 20% of their respective assets in any securities and other instruments in which money market funds are permitted to invest in accordance with Rule 2a-7 of the 1940 Act. Practices described below relating to illiquid securities, investment company securities, loans of portfolio securities and repurchase agreements also apply to BlackRock Cash Funds: Treasury and BlackRock Cash Funds: Government.

BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional may invest in any of the instruments or engage in any practice described below.

Asset-Backed and Commercial Mortgage-Backed Securities. BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime may invest in asset-backed and commercial mortgage-backed securities. Asset-backed securities are securities backed by installment contracts, credit-card receivables or other assets. Commercial mortgage-backed securities are securities backed by commercial real estate properties. Both asset-backed and commercial mortgage-backed securities represent interests in “pools” of assets in which payments of both interest and principal on the securities are made on a regular basis. The payments are, in effect, “passed through” to the holder of the securities (net of any fees paid to the issuer or guarantor of the securities). The average life of asset-backed and commercial mortgage-backed securities varies with the maturities of the underlying instruments and, as a result of prepayments, can often be shorter or longer (as the case may be) than the original maturity of the assets underlying the securities. For this and other reasons, an asset-backed and commercial mortgage-backed security’s stated maturity may be shortened or extended, and the security’s total return may be difficult to predict precisely. The Funds may invest in such securities up to the limits prescribed by Rule 2a-7 and other provisions of or under the 1940 Act. Changes in liquidity of these securities may result in significant, rapid and unpredictable changes in prices for credit-linked securities. Also see “Mortgage Pass-Through Securities” and “Mortgage Securities.”

Bank Obligations. BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime may invest in bank obligations, including certificates of deposit (“CDs”), time deposits, bankers’ acceptances and other short-term obligations of domestic and foreign banks, foreign subsidiaries of domestic banks, foreign branches of domestic banks, foreign branches of foreign banks, and domestic branches of foreign banks, domestic savings and loan associations and other banking institutions. Certain bank obligations may benefit from existing or future governmental debt guarantee programs.

CDs are negotiable certificates evidencing the obligation of a bank to repay funds deposited with it for a specified period of time.

Time deposits (“TDs”) are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. TDs that may be held by the Funds will not benefit from insurance from the Bank Insurance Fund or the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation (“FDIC”).

Bankers’ acceptances are credit instruments evidencing the obligation of a bank to pay a draft drawn on it by a customer. These instruments reflect the obligation both of the bank and of the drawer to pay the face amount of the instrument upon maturity. The other short-term obligations may include uninsured, direct obligations bearing fixed-, floating- or variable-interest rates.

Domestic commercial banks organized under federal law are supervised and examined by the Comptroller of the Currency and are required to be members of the Federal Reserve System and to have their deposits insured by the FDIC. Domestic banks organized under state law are supervised and examined by state banking authorities and are members of the Federal Reserve System only if they elect to join. In addition, state banks whose CDs may be purchased by the Funds are insured by the FDIC (although such insurance may not be of material benefit to a Fund, depending on the principal amount of the CDs of each bank held by the Fund) and are subject to federal examination and to a substantial body of federal law and regulation. As a result of federal or state laws and regulations, domestic branches of domestic banks whose CDs may be purchased by the Funds generally are required, among other things, to maintain specified levels of reserves, are limited in the amounts that they can loan to a single borrower and are subject to other regulations designed to promote financial soundness. However, not all of such laws and regulations apply to the foreign branches of domestic banks.

Obligations of foreign branches of domestic banks, foreign subsidiaries of domestic banks and domestic and foreign branches of foreign banks, such as CDs and TDs, may be general obligations of the parent banks in addition to the issuing branch, or may be limited by the terms of a specific obligation and/or governmental regulation. Such obligations are subject to different risks than are those of domestic banks. These risks include foreign economic and political developments, foreign governmental restrictions that may adversely affect payment of principal and interest on the obligations, foreign exchange controls and foreign withholding and other taxes on amounts realized on the obligations. These foreign branches and subsidiaries are not necessarily subject to the same or similar regulatory requirements that apply to domestic banks, such as mandatory reserve requirements, loan limitations, and accounting, auditing and financial record keeping requirements. In addition, less information may be publicly available about a foreign branch of a domestic bank or about a foreign bank than about a domestic bank.

Obligations of U.S. branches of foreign banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation or by federal or state regulation, as well as governmental action in the country in which the foreign bank has its head office. A domestic branch of a foreign bank with assets in excess of $1 billion may be subject to reserve requirements imposed by the Federal Reserve System or by the state in which the branch is located if the branch is licensed in that state.

In addition, federal branches licensed by the Comptroller of the Currency and branches licensed by certain states may be required to: (1) pledge to the appropriate regulatory authority, by depositing assets with a designated bank within the relevant state, a certain percentage of their assets as fixed from time to time by such regulatory authority; and (2) maintain assets within the relevant state in an amount equal to a specified percentage of the aggregate amount of liabilities of the foreign bank payable at or through all of its agencies or branches within the state.

Commercial Paper and Short-Term Corporate Debt Instruments. The Funds may invest in commercial paper (including variable amount master demand notes), which consists of short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and usually has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit a Fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between a Fund, as lender, and the borrower. The interest on these notes varies pursuant to the arrangements between the Fund and the borrower. Both the borrower and the Fund have the right to vary the amount of the outstanding indebtedness on the notes. BFA monitors on an ongoing basis the ability of an issuer of a demand instrument to pay principal and interest on demand.

The Funds also may invest in non-convertible corporate debt securities ( e.g. , bonds and debentures) with not more than thirteen months remaining to maturity at the date of settlement. A Fund will invest only in such

corporate bonds and debentures that are deemed appropriate by BFA in accordance with Rule 2a-7 under the 1940 Act. Subsequent to its purchase by a Fund, an issue of securities may cease to be rated or its rating may be reduced below the minimum rating required for purchase by the Fund. BFA will consider such an event in determining whether the Fund should continue to hold the obligation. To the extent the Fund continues to hold the obligation, it may be subject to additional risk of default.

Asset-Backed Commercial Paper. A Fund may also invest in asset-backed commercial paper. Asset-backed commercial paper is a type of securitized commercial paper product used to fund purchases of financial assets by special purpose finance companies called conduits. The financial assets may include assets such as pools of trade receivables, car loans and leases, and credit card receivables, among others. Asset-backed commercial paper is typically tracked and rated by one or more credit rating agencies. Some asset-backed commercial paper programs maintain a back-up liquidity facility provided by a major bank, which is intended to be used if the issuer is unable to issue new asset-backed commercial paper.

Floating-Rate and Variable-Rate Obligations. The Funds may purchase debt instruments with interest rates that are periodically adjusted at specified intervals or whenever a benchmark rate or index changes. The floating-rate and variable-rate instruments that the Funds may purchase include certificates of participation in such instruments. The interest rate adjustments generally limit the increase or decrease in the amount of interest received on the debt instruments. Floating-rate and variable-rate instruments are subject to interest rate risk and credit risk.

The Funds may purchase floating-rate and variable-rate demand notes and bonds, which are obligations ordinarily having stated maturities in excess of thirteen months, but which permit the holder to demand payment of principal at any time, or at specified intervals not exceeding 397 days, as defined in accordance with Rule 2a-7 and the 1940 Act. Variable-rate demand notes including master demand notes are demand obligations that permit a Fund to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between a Fund, as lender, and the borrower. The interest rates on these notes fluctuate from time to time. The issuer of such obligations ordinarily has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days’ notice to the holders of such obligations. The interest rate on a floating-rate demand obligation is based on a known lending rate, such as a bank’s prime rate, and is adjusted automatically each time such rate is adjusted. The interest rate on a variable-rate demand obligation is adjusted automatically at specified intervals. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks.

These obligations are direct lending arrangements between the lender and borrower. There may not be an established secondary market for these obligations, although they are redeemable at face value. Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, a Fund’s right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies and a Fund may invest in obligations that are not so rated only if BFA determines that at the time of investment the obligations are of comparable quality to the other obligations in which a Fund may invest. BFA considers on an ongoing basis the creditworthiness of the issuers of the floating-rate and variable-rate demand obligations in a Fund’s portfolio.

Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions. The Funds may purchase or sell securities on a when-issued or delayed-delivery basis and make contracts to purchase or sell securities for a fixed price at a future date beyond customary settlement time. Securities purchased or sold on a when-issued, delayed-delivery or forward commitment basis involve a risk of loss if the value of the security to be purchased declines or the value of the security to be sold increases before the settlement date. Although the Funds will generally purchase securities with the intention of acquiring them, the Funds may dispose of securities purchased on a when-issued, delayed-delivery or a forward commitment basis before settlement when deemed appropriate by BFA.

principal sum deposited by the purchaser. Funding agreements will also guarantee the return of principal and may guarantee a stream of payments over time. A funding agreement has a fixed maturity and may have either a fixed-, variable- or floating-interest rate that is based on an index and guaranteed for a fixed time period. The Funds will purchase short-term funding agreements only from banks and insurance companies. The Funds may also purchase Guaranteed Investment Contracts.

The secondary market, if any, for these funding agreements is limited; thus, such investments purchased by the Funds may be treated as illiquid. If a funding agreement is determined to be illiquid it will be valued at its fair market value as determined by procedures approved by the Board of Trustees. Valuation of illiquid indebtedness involves a greater degree of judgment in determining the value of each Fund’s assets than if the value were based on available market quotations.

Illiquid Securities. Each Fund may invest in securities as to which a liquid trading market does not exist, provided such investments are consistent with its investment objective. Such securities may include securities that are not readily marketable, such as privately issued securities and other securities that are subject to legal or contractual restrictions on resale, floating-rate and variable-rate demand obligations as to which the Fund cannot exercise a demand feature on not more than seven days’ notice and as to which there is no secondary market, and repurchase agreements providing for settlement more than seven days after notice.

Investment Company Securities. Each Fund may invest in shares of open-end investment companies, including investment companies that are affiliated with the Funds and BFA, that invest exclusively in high-quality short-term securities to the extent permitted under the 1940 Act, including the rules, regulations and exemptive orders obtained thereunder; provided, however, that a Fund, if it has knowledge that its beneficial interests are purchased by another investment company investor pursuant to Section 12(d)(1)(G) of the 1940 Act, will not acquire any securities of registered open-end management investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act. Other investment companies in which a Fund invests can be expected to charge fees for operating expenses, such as investment advisory and administration fees, that would be in addition to those charged by the Fund. A Fund may also purchase shares of exchange listed closed-end funds to the extent permitted under the 1940 Act. Under the 1940 Act, a Fund’s investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund’s total assets with respect to any one investment company, and (iii) 10% of the Fund’s total assets with respect to investment companies in the aggregate. To the extent allowed by law or regulation, each Fund may invest its assets in securities of investment companies that are money market funds, including those advised by BFA or otherwise affiliated with BFA, in excess of the limits discussed above.

Letters of Credit. Certain of the debt obligations (including municipal securities, certificates of participation, commercial paper and other short-term obligations) that the Funds may purchase may be backed by an unconditional and irrevocable letter of credit issued by a bank, savings and loan association or insurance company that assumes the obligation for payment of principal and interest in the event of default by the issuer. Only banks, savings and loan associations and insurance companies that, in the opinion of BFA, are of comparable quality to issuers of other permitted investments of the Funds may be used for letter of credit-backed investments.

Loans of Portfolio Securities. Each Fund may lend portfolio securities to certain creditworthy borrowers, including borrowers affiliated with BFA. The borrowers provide collateral that is maintained in an amount at least equal to the current market value of the securities loaned plus any accrued interest. A Fund may terminate a loan at any time and obtain the return of the securities loaned. Each Fund is entitled to receive the value of any interest or cash or non-cash distributions paid on the loaned securities.

With respect to loans that are collateralized by cash, the borrower will be entitled to receive a fee based on the amount of cash collateral. The Fund is compensated by the difference between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In the case of collateral other than cash, the Fund is compensated by a fee paid by the borrower equal to a percentage of the market value of the loaned securities. Any cash collateral may be reinvested in certain short-term instruments either directly on behalf of

each lending Fund or through one or more joint accounts or money market funds, including those managed by BFA; such reinvestments are subject to investment risk.

Securities lending involves exposure to certain risks, including operational risk ( i.e. , the risk of losses resulting from problems in the settlement and accounting process), “gap” risk ( i.e. , the risk of a mismatch between the return on cash collateral reinvestments and the fees the Fund has agreed to pay a borrower), and credit, legal, counterparty and market risk. In the event a borrower does not return a Fund’s securities as agreed, the Fund may experience losses if the proceeds received from liquidating the collateral do not at least equal the value of the loaned security at the time the collateral is liquidated plus the transaction costs incurred in purchasing replacement securities.

A Fund may pay a portion of the interest or fees earned from securities lending to a borrower as described above, and to a securities lending agent who administers the lending program in accordance with guidelines approved by the Trust’s Board of Trustees. BTC acts as securities lending agent for the Funds subject to the overall supervision of BFA. BTC receives a portion of the revenues generated by securities lending activities as compensation for its services in this regard.

Loan Participation Agreements. Each Fund may purchase interests in loan participations that typically represent direct participation in a loan to a corporate borrower, and generally are offered by an intermediary bank or other financial institution or lending syndicate. Under these loan participation arrangements, a Fund will have the right to receive payments of principal, interest and any fees to which it is entitled from the bank selling the loan participation upon receipt by the bank of the payments from the borrower. The borrower in the underlying loan will be deemed to be the issuer of the participation interest except to the extent the Fund derives its rights from the intermediary bank that sold the loan participation. Such loans must be made to issuers in whose obligations the Funds may invest.

Because the bank issuing the loan participation does not guarantee the participation in any way, the participation is subject to the credit risks associated with the underlying corporate borrower. In addition, it may be necessary under the terms of the loan participation for the Funds to assert their rights against the underlying corporate borrower in the event that the underlying corporate borrower should fail to pay principal and interest when due. Thus, the Funds could be subject to delays, expenses, and risks that are greater than those that would have been involved if the Funds had purchased a direct obligation of the borrower. Moreover, under the terms of the loan participation, the Funds may be regarded as creditors of the issuing bank (rather than of the underlying corporate borrower), so that the Funds also may be subject to the risk that the issuing bank may become insolvent. Further, in the event of the bankruptcy or insolvency of the corporate borrower, the loan participation might be subject to certain defenses that can be asserted by the borrower as a result of improper conduct by the issuing bank.

The secondary market, if any, for these loan participation interests is limited; thus, such participations purchased by the Funds may be treated as illiquid. If a loan participation is determined to be illiquid, it will be valued at its fair market value as determined by procedures approved by the Board of Trustees. Valuation of illiquid indebtedness involves a greater degree of judgment in determining the value of each Fund’s assets than if the value were based on available market quotations.

Medium-Term Notes. A Fund may invest in medium-term notes that have remaining maturities that are consistent with the conditions of Rule 2a-7. Medium-term notes are a form of corporate debt financing. They are often issued on a regular or continuous basis without the requirement to produce a new set of legal documentation at the time of each issuance. Medium-term notes have maturities that range widely based on the needs of the issuer; although they most often mature between nine months and ten years, they may have longer maturities.

Mortgage Pass-Through Securities. Each Fund may invest in mortgage pass-through securities, which are a category of pass-through securities backed by pools of mortgages and issued by one of several U.S. government entities or U.S. government-sponsored enterprises including: the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation. In the basic mortgage pass-through structure, mortgages with similar

issuer, term and coupon characteristics are collected and aggregated into a “pool” consisting of multiple mortgage loans. The pool is assigned a CUSIP number and undivided interests in the pool are traded and sold as pass-through securities. The holder of the security is entitled to a pro rata share of principal and interest payments (including unscheduled prepayments) from the pool of mortgage loans.

The Funds may, to the extent permitted by Rule 2a-7 under the 1940 Act, invest in mortgage securities issued by private non-government entities. Mortgage securities issued by non-government entities may be subject to greater credit risk than those issued by government entities or government-sponsored enterprises. The performance of privately-issued mortgage securities may depend on the integrity and competence of the institutions that originate the underlying mortgages, yet investors in these mortgage securities may have only limited access to information enabling investors to evaluate the practices of these mortgage originators.

In order to prevent defaults by troubled mortgage borrowers, the sponsors of mortgage securities may have to renegotiate and investors in mortgage securities issued by government entities, government-sponsored enterprises or non-government entities may have to accept less favorable interest rates or other terms on the mortgages underlying these securities. Unanticipated mortgage defaults or renegotiations of mortgage terms are likely to depress the prices of related mortgage securities. Should the government adopt new laws providing mortgage borrowers with additional rights to renegotiate interest rates, alter terms, obtain orders to modify their mortgage terms through the bankruptcy courts, or otherwise allow borrowers to modify or restructure existing mortgages, this may negatively impact mortgage securities. Although mortgage securities may be supported by some form of government or private guarantee and/or insurance, there is no assurance that guarantors or insurers will meet their obligations. Guarantees, insurance and other forms of credit enhancement supporting mortgage securities may also be insufficient to cover all losses on underlying mortgages if mortgage borrowers default at a greater than expected rate. Non-government mortgage securities may be subject to greater price changes than government issues.

An investment in a specific pool of pass-through securities requires an analysis of the specific prepayment risk of mortgages within the covered pool (since mortgagors typically have the option to prepay their loans). The level of prepayments on a pool of mortgage securities is difficult to predict and can impact the subsequent cash flows and value of the mortgage pool. In addition, when trading specific mortgage pools, precise execution, delivery and settlement arrangements must be negotiated for each transaction. These factors combine to make trading in mortgage pools somewhat cumbersome. For these and other reasons, the Funds may obtain exposure to U.S. agency mortgage pass-through securities primarily through the use of “to-be-announced” or “TBA” transactions. “TBA” refers to a commonly used mechanism for the forward settlement of U.S. agency mortgage pass-through securities, and not to a separate type of mortgage-backed security. Most transactions in mortgage pass-through securities occur through the use of TBA transactions. TBA transactions generally are conducted in accordance with widely-accepted guidelines that establish commonly observed terms and conditions for execution, settlement and delivery. In a TBA transaction, the buyer and seller decide on general trade parameters, such as agency, settlement date, par amount, and price. The actual pools delivered generally are determined two days prior to the settlement date. The Funds may use TBA transactions in several ways. For example, the Funds may regularly enter into TBA agreements and “roll over” such agreements prior to the settlement date stipulated in such agreements. This type of TBA transaction is sometimes known as a “TBA roll.” In a TBA roll, a Fund generally will sell the obligation to purchase the pools stipulated in the TBA agreement prior to the stipulated settlement date and will enter into a new TBA agreement for future delivery of pools of mortgage pass-through securities. In addition, a Fund may enter into TBA agreements and settle such transactions on the stipulated settlement date by accepting actual receipt or delivery of the pools of mortgage pass-through securities stipulated in the TBA agreement. Default by or bankruptcy of a counterparty to a TBA transaction would expose a Fund to possible loss because of adverse market action, expenses or delays in connection with the purchase or sale of the pools of mortgage pass-through securities specified in the TBA transaction. To minimize this risk, the Funds will enter into TBA transactions only with established counterparties (such as major broker-dealers) and BFA will monitor the creditworthiness of such counterparties. The use of TBA rolls may cause the Funds to experience higher portfolio turnover and to pay higher capital gain distributions, which may result in larger amounts of short-term capital gains allocable to shareholders.

Mortgage Securities. BlackRock Cash Funds: Institutional and BlackRock Cash Funds: Prime may invest in mortgage securities. Mortgage securities are issued by government and non-government entities such as banks, mortgage lenders, or other institutions. A mortgage security is an obligation of the issuer that is backed by a mortgage or pool of mortgages or a direct interest in an underlying pool of mortgages. Some mortgage securities, such as collateralized mortgage obligations, make payments of both principal and interest at a range of specified intervals; others make semi-annual interest payments at a pre-determined rate and repay principal at maturity (like a typical bond). Mortgage securities are based on different types of mortgages, including those on commercial real estate or residential properties. Stripped mortgage securities are created when the interest and principal components of a mortgage security are separated and sold as individual securities. In the case of a stripped mortgage security, the holder of the “principal-only” security (PO) receives the principal payments made by the underlying mortgage, while the holder of the “interest-only” security (IO) receives interest payments from the same underlying mortgage.

The value of mortgage securities may change due to shifts in the market’s perception of the creditworthiness of issuers and changes in interest rates or liquidity. The value of some mortgage-backed securities may be particularly sensitive to changes in prevailing interest rates. In addition, regulatory or tax changes may adversely affect the mortgage securities market as a whole. Mortgage securities issued by non-government entities may be subject to greater credit risk than those issued by government entities. The performance of privately-issued mortgage securities may depend on the integrity and competence of the institutions that originate the underlying mortgages, yet investors in these mortgage securities may have only limited access to information required to evaluate the practices of these mortgage originators. In order to prevent defaults by troubled mortgage borrowers, the sponsors of mortgage securities may have to renegotiate and investors in mortgage securities may have to accept less favorable interest rates or other terms on the mortgages underlying these securities. Unanticipated mortgage defaults or renegotiations of mortgage terms are likely to depress the prices of related mortgage securities. Although mortgage securities may be supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations. Guarantees, insurance and other forms of credit enhancement supporting mortgage securities may also be insufficient to cover all losses on underlying mortgages if mortgage borrowers default at a greater than expected rate.

Non-government mortgage securities may be subject to greater price changes than government issues. Mortgage securities are subject to prepayment risk. Prepayment risk is the risk that early principal payments made on the underlying mortgages, usually in response to a reduction in interest rates, will result in the return of principal to the investor, causing the investor to be invested subsequently at a lower current interest rate. Alternatively, in a rising interest rate environment, mortgage security values may be adversely affected when prepayments on underlying mortgages do not occur as anticipated, resulting in the extension of the security’s effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. The prices of stripped mortgage securities tend to be more volatile in response to changes in interest rates than those of non-stripped mortgage securities. In addition, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations. Also see “Asset-Backed and Commercial Mortgage-Backed Securities” and “Mortgage Pass-Through Securities.”

Municipal Securities. Each Fund may invest in municipal securities. Municipal securities are generally issued by states and local governments and their agencies, authorities and other instrumentalities. Municipal bonds are subject to interest rate, credit and market risk. The ability of a municipal security issuer to make payments on that security could be affected by litigation, legislation or other political events or the bankruptcy of the issuer. Lower-rated municipal bonds are subject to greater credit and market risk than higher quality municipal bonds. Municipal securities in which the Funds may invest include, but are not limited to, municipal lease obligations and securities issued by entities whose underlying assets are municipal bonds. There is no guarantee that income from municipal securities will be exempt from federal and state taxes. Changes in federal or state tax treatment of municipal securities may make municipal securities less attractive as investments or cause them to lose value.

Each Fund will invest in high-quality, long-term municipal bonds, municipal notes and short-term commercial paper with remaining maturities not exceeding 397 calendar days.

Non-U.S. Obligations. The Funds may invest in certain securities of non-U.S. issuers. Investing in the securities of non-U.S. issuers involves special risks and considerations not typically associated with investing in U.S. issuers. These include differences in accounting, auditing and financial reporting standards, the possibility of expropriation or potentially confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investments in non-U.S. countries, potential restrictions of the flow of international capital and transaction costs of foreign currency conversions. Non-U.S. issuers may be subject to less governmental regulation than U.S. issuers. Moreover, individual non-U.S. economies may differ favorably or unfavorably from the U.S. economy with respect to growth of gross domestic product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions. The Funds may invest in U.S. dollar-denominated short-term obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities that are determined by BFA to be of comparable quality to the other obligations in which the Funds may invest. The Funds may also invest in debt obligations of supranational entities. Supranational entities include international organizations designated or supported by governmental entities to promote economic reconstruction or development and international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the World Bank), the Asian Development Bank and the InterAmerican Development Bank. The percentage of each Fund’s assets invested in obligations of foreign governments and supranational entities will vary depending on the relative yields of such securities, the economic and financial markets of the countries in which the investments are made and the interest rate climate of such countries.

Participation Interests. Each Fund may invest in participation interests in any type of security in which the Fund may invest. A participation interest gives the Fund an undivided interest in the underlying securities in the proportion that the Fund’s participation interest bears to the total principal amount of the underlying securities.

Regulation Regarding Derivatives. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to registered investment companies to regulation by the CFTC if a fund invests more than a prescribed level of its liquidation value in CFTC-regulated futures, options and swaps (“CFTC Derivatives”), or if the fund markets itself as providing investment exposure to such instruments. To the extent a Fund uses CFTC-regulated futures, options and swaps, it intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, each Fund’s investment adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act (“CEA”) pursuant to Rule 4.5 under the CEA. The investment adviser to each Fund is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect of such Fund.

Repurchase Agreements. The Funds may enter into repurchase agreements. A repurchase agreement is an instrument under which the purchaser ( i.e. , the Fund) acquires the security and the seller agrees, at the time of the sale, to repurchase the security at a mutually agreed upon time and price, thereby determining the yield during the purchaser’s holding period. Repurchase agreements may be construed to be collateralized loans by the purchaser to the seller secured by the securities transferred to the purchaser. If a repurchase agreement is construed to be a collateralized loan, the underlying securities will not be considered to be owned by each Fund but only to constitute collateral for the seller’s obligation to pay the repurchase price, and, in the event of a default by the seller, each Fund may suffer time delays and incur costs or losses in connection with the disposition of the collateral.

nationally recognized statistical rating organizations (“NRSRO”), or, if unrated, determined to be of comparable quality by BFA. Collateral, however, is not limited to the foregoing and may include for example obligations rated below the highest category by NRSROs. Collateral for a repurchase agreement may also include securities that a Fund could not hold directly without the repurchase obligation. Irrespective of the type of collateral underlying the repurchase agreement, in the case of a repurchase agreement entered into by a money market fund, the repurchase obligation of a seller must involve minimal credit risk to a Fund, and otherwise satisfy credit quality standards set forth in the Fund’s Rule 2a-7 procedures.

Repurchase agreements pose certain risks for a Fund that utilizes them. Such risks are not unique to the Fund but are inherent in repurchase agreements. The Funds seek to minimize such risks but because of the inherent legal uncertainties involved in repurchase agreements, such risks cannot be eliminated. Lower quality collateral and collateral with longer maturities may be subject to greater price fluctuations than higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty were to default, lower quality collateral may be more difficult to liquidate than higher quality collateral. Should the counterparty default and the amount of collateral not be sufficient to cover the counterparty’s repurchase obligation, the Fund would retain the status of an unsecured creditor of the counterparty ( i.e. , the position the Fund would normally be in if it were to hold, pursuant to its investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the amount of the shortfall. As an unsecured creditor, a Fund would be at risk of losing some or all of the principal and income involved in the transaction.

Restricted Securities. Restricted securities are subject to legal restrictions on their sale. Difficulty in selling restricted securities may result in a loss or be costly to the Funds. Restricted securities generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, as amended, or in a registered public offering. Where registration is required, the restricted security’s holder may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time the holder decides to seek registration and the time the holder may be permitted to sell the security under an effective registration statement. If, during that period, adverse market conditions were to develop, the holder might obtain a less favorable price than prevailed when it decided to seek registration of the security.

Unrated Investments. Each Fund may purchase instruments that are not rated if, in the opinion of BFA, such obligations are of an investment quality that is comparable to other rated investments that are permitted for purchase by a Fund, and they are purchased in accordance with the Trust’s procedures adopted by the Trust’s Board of Trustees in accordance with Rule 2a-7 under the 1940 Act. After purchase by a Fund, a security may cease to be rated or its rating may be reduced below the minimum required for purchase by the Fund. Neither event will require an immediate sale of such security by a Fund provided that, when a security ceases to be rated, BFA determines that such security presents minimal credit risks and, provided further that, when a security rating is downgraded below the eligible quality for investment or no longer presents minimal credit risks, BFA finds that the sale of such security would not be in a Fund’s shareholders’ best interests.

To the extent the ratings given by a NRSRO may change as a result of changes in such organization or its rating systems, the Funds will attempt to use comparable ratings as standards for investments in accordance with the investment policies contained in their Prospectuses and this SAI.

U.S. Government Obligations. Each Fund may invest in U.S. government obligations, including securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. Payment of principal and interest on U.S. government obligations (i) may be backed by the full faith and credit of the United States (as with U.S. Treasury obligations and Ginnie Mae certificates), or (ii) may be backed solely by the issuing or guaranteeing agency or instrumentality itself (as with Fannie Mae notes). In the latter case, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, which agency or instrumentality may be privately owned. There can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it is not obligated to do so. As a general matter, the value of debt instruments, including U.S. government obligations, declines when market interest rates increase and rises when market interest rates decrease. Certain types of U.S. government obligations are subject to fluctuations in yield or value due to their structure or contract terms.

U.S. Treasury Obligations. U.S. Treasury obligations are direct obligations of the U.S. government that are backed by the full faith and credit of the United States. U.S. Treasury obligations include, among other things, U.S. Treasury bills, notes, bonds, and the separately traded principal and interest components of securities guaranteed or issued by the U.S. Treasury if such components are traded independently under the Separate Trading of Registered Interest and Principal of Securities Program.

Disclosure of Portfolio Holdings

The Board of Trustees of the Trust, the Board of Trustees of MIP and the Board of Directors of BFA have each approved Portfolio Information Distribution Guidelines (the “Guidelines”) regarding the disclosure of the Funds’ or Master Portfolios’ portfolio securities, as applicable, and other portfolio information. The purpose of the Guidelines is to ensure that (i) shareholders and prospective shareholders of the Fund have equal access to portfolio holdings and characteristics and (ii) third parties (such as consultants, intermediaries and third-party data providers) have access to such information no more frequently than shareholders and prospective shareholders.

Pursuant to the Guidelines, the Trust, MIP and BFA may, under certain circumstances as set forth below, make selective disclosure with respect to a Fund’s or Master Portfolio’s portfolio holdings. The Boards of Trustees of the Trust and MIP have approved the adoption by the Trust and MIP, respectively, of the Guidelines, and employees of BFA are responsible for adherence to the Guidelines. The Boards of Trustees of the Trust and MIP provide ongoing oversight of the Trust’s, MIP’s and BFA’s compliance with the Guidelines. Examples of the types of information that may be disclosed pursuant to the Guidelines are provided below. This information may be both material non-public information (“Confidential Information”) and proprietary information of BlackRock. Information that is non-material or that may be obtained from public sources ( i.e. , information that has been publicly disclosed via a filing with the SEC (e.g., fund annual report), through a press release or placement on a publicly-available internet website) shall not be deemed Confidential Information.

Except as otherwise provided in the Guidelines, Confidential Information relating to the Trust or MIP may not be distributed to persons not employed by BlackRock unless the Trust or MIP has a legitimate business purpose for doing so. Confidential Information may also be disclosed to the Trustees of the Trust or MIP and their respective counsel, outside counsel for the Trust or MIP and the Trust’s or MIP’s auditors, and may be disclosed to the Trust’s or MIP’s service providers and other appropriate parties with the approval of the Trust’s or MIP’s Chief Compliance Officer, BlackRock’s General Counsel, BlackRock’s Chief Compliance Officer or the designee of such persons, and in addition, in the case of disclosure to third parties, subject to a confidentiality or non-disclosure agreement, as necessary, in accordance with the Guidelines. Information may also be disclosed as required by applicable laws and regulation.

Examples of instances in which selective disclosure of the Trust’s or MIP’s portfolio securities or other portfolio information may be appropriate include: (i) disclosure for due diligence purposes to an investment adviser that is in merger or acquisition talks with BlackRock; (ii) disclosure to a newly-hired investment adviser or sub-adviser prior to its commencing its duties; (iii) disclosure to a third-party feeder fund consistent with its agreement with a master portfolio advised by BlackRock; (iv) disclosure to third-party service providers of legal, auditing, custody, proxy voting, pricing and other services to the Trust or MIP or a third-party feeder fund; or (v) disclosure to a rating or ranking organization.

Asset and Return Information . Data on net asset values, asset levels (by total fund and share class), accruals, yields, capital gains, dividends and fund returns (net of fees by share class) are generally available to shareholders, prospective shareholders, consultants and third-party data providers upon request, as soon as such data is available. Data on number of shareholders (total and by share class) and benchmark returns (including performance measures such as standard deviation, information ratio, Sharpe ratio, alpha, and beta) are generally available to shareholders, prospective shareholders, consultants and third-party data providers as soon as such data is released after month-end.

Portfolio Characteristics . Examples of portfolio characteristics include sector allocation, credit quality breakdown, maturity distribution, duration and convexity measures, average credit quality, average maturity, average coupon, top 10 holdings with percent of the fund held, average market capitalization, capitalization range, ROE, P/E, P/B, P/CF, P/S and EPS.

Month-end portfolio characteristics are available to shareholders, prospective shareholders, intermediaries and consultants on the fifth calendar day after month-end. ¹

Fund Fact Sheets, which contain certain portfolio characteristics, are available, in both hard copy and electronically, to shareholders, prospective shareholders, intermediaries and consultants on a monthly or quarterly basis no earlier than the fifth calendar day after the end of a month or quarter.

Money Market Performance Reports, which contain money market fund performance for the recent month, rolling 12-month average yields and benchmark performance, are available on a monthly basis to shareholders, prospective shareholders, intermediaries and consultants by the tenth calendar day of the month. This information may also be obtained electronically upon request.

Portfolio Holdings. In addition to position description, portfolio holdings may also include issuer name, CUSIP, ticker symbol, total shares and market value for equity portfolios and issuer name, CUSIP, ticker symbol, coupon, maturity, current face value and market value for fixed income portfolios. Other information that may be provided includes quantity, SEDOL, market price, yield, weighted average life, duration and convexity of each security in a Fund as of a specific date.

The following shall not be deemed to be a disclosure of Confidential Information:

•

Generally, month-end portfolio holdings may be made available to fund shareholders, prospective shareholders, intermediaries, consultants and third party data providers ( e.g. , Lipper, Morningstar and Bloomberg) on the 20th calendar day after the end of each month, except for BlackRock Global Allocation Fund, Inc., BlackRock Global Dynamic Equity Fund, BlackRock Global Allocation Portfolio of BlackRock Series Fund, Inc. and BlackRock Global Allocation V.I. Fund of BlackRock Variable Series Funds, Inc., whose holdings may be made available on the 40 ^th calendar day after the end of the quarter (based on each Fund’s fiscal year end). ¹

The following information as it relates to money market funds, unless made available to the public, shall be deemed a disclosure of Confidential Information and, subject to the Guidelines, requires a confidentiality or non-disclosure arrangement:

•

Weekly portfolio holdings made available to fund shareholders, prospective shareholders, intermediaries and consultants on the next business day after the end of the weekly period.

•

Weekly portfolio holdings and characteristics made available to third-party data providers ( e.g. , Lipper, Morningstar, Bloomberg, S&P, Fitch, Moody’s, Crane Data and iMoneyNet, Inc.) on the next business day after the end of the weekly period.

Other Information. The Guidelines shall also apply to other Confidential Information of a Fund or Master Portfolio such as attribution analyses or security-specific information ( e.g. , information about Fund or Master Portfolio holdings where an issuer has been downgraded, been acquired or declared bankruptcy).

Implementation. All BlackRock employees must adhere to the Guidelines when responding to inquiries from shareholders, prospective shareholders, consultants, and third-party databases. The Trust’s or MIP’s Chief Compliance Officer is responsible for oversight of compliance with the Guidelines and will recommend to the Board of Trustees of the Trust or MIP, as applicable, any changes to the Guidelines that he or she deems necessary or appropriate to ensure the Funds’, the Master Portfolios’ and BlackRock’s compliance.

¹	The precise number of days specified above may vary slightly from period to period depending on whether the specified calendar day falls on a weekend or holiday.

Ongoing Arrangements. BFA has entered into ongoing agreements to provide selective disclosure of Fund or Master Portfolio portfolio holdings to the following persons or entities:

Trust’s Board of Trustees, MIP’s Board of Trustees and, if necessary, Independent Trustees’ counsel and Trust/MIP counsel

Trust’s/MIP’s Transfer Agent

Trust’s/MIP’s Custodian

Trust’s/MIP’s Administrator, if applicable

Trust’s/MIP’s independent registered public accounting firm

Trust’s/MIP’s accounting services provider

Independent rating agencies — Morningstar, Inc., Lipper Inc., S&P, Moody’s, Fitch

Information aggregators — Markit on Demand, Thomson Financial, Bloomberg, eVestments Alliance, Informa/PSN, Investment Solutions, Crane Data, and iMoneyNet

Sponsors of 401(k) plans that include BlackRock-advised funds — E.I. Dupont de Nemours and Company, Inc.

10.

Consultants for pension plans that invest in BlackRock-advised funds — Rocaton Investment Advisors, LLC, Mercer Investment Consulting, Callan Associates, Brockhouse & Cooper, Cambridge Associates, Morningstar/Investorforce, Russell Investments (Mellon Analytical Solutions) and Wilshire Associates

11.

Pricing Vendors — Reuters Pricing Service, Bloomberg, FT Interactive Data (FT IDC), ITG, Telekurs Financial, FactSet Research Systems, Inc., JPMorgan Pricing Direct (formerly Bear Stearns Pricing Service), Standard and Poor’s Security Evaluations Service, Lehman Index Pricing, Bank of America High Yield Index, Loan Pricing Corporation (LPC), LoanX, Super Derivatives, iBOXX Index, Barclays Euro Gov’t Inflation-Linked Bond Index, JPMorgan Emerging & Developed Market Index, Reuters/WM Company, Nomura BPI Index, Japan Securities Dealers Association, Valuation Research Corporation and Murray, Devine & Co., Inc.

12.

Portfolio Compliance Consultants — Oracle/i-Flex Solutions, Inc.

13.

Third-party feeder funds — Hewitt Money Market Fund, Hewitt Series Fund, Hewitt Financial Services LLC, Homestead, Inc., Transamerica, State Farm Mutual Fund and Sterling Capital Funds, and their respective boards, sponsors, administrators and other service providers

14.

Affiliated feeder funds — BlackRock Cayman Prime Money Market Fund, Ltd. and BlackRock Cayman Treasury Money Market Fund Ltd., and their respective boards, sponsors, administrators and other service providers

15.

Other — Investment Company Institute

With respect to each such arrangement, the Trust or MIP has a legitimate business purpose for the release of information. The release of the information is subject to confidential treatment to prohibit the entity from sharing with an unauthorized source or trading upon the information provided. The Trust, MIP, BlackRock and their affiliates do not receive any compensation or other consideration in connection with such arrangements.

monitor BFA’s securities trading desks to determine whether individuals or firms who have received Confidential Information have made any trades on the basis of that information. In addition, BFA maintains an internal restricted list to prevent trading by the personnel of BFA or its affiliates in securities — including securities held by a Fund/Master Portfolio — about which BFA has Confidential Information. There can be no assurance, however, that the Trust’s or MIP’s policies and procedures with respect to the selective disclosure of portfolio holdings will prevent the misuse of such information by individuals or firms that receive such information.

Management

The Board of Trustees of the Trust consists of fourteen individuals (each, a “Trustee”), twelve of whom are not “interested persons” as defined in the 1940 Act (“Independent Trustees”). The same fourteen individuals serve on the Board of Trustees of MIP and the same twelve Trustees are Independent Trustees with respect to MIP. The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds (the “Closed-End Complex”), two complexes of open-end funds (the “Equity-Liquidity Complex” and the “Equity-Bond Complex”) and one complex of exchange-traded funds (each, a “BlackRock Fund Complex”). The Trust and MIP are included in the BlackRock Fund Complex referred to as the Equity-Liquidity Complex. The Trustees also oversee as board members the operations of the other open-end registered investment companies included in the Equity-Liquidity Complex.

The Board has overall responsibility for the oversight of the Trust and the Funds. The Co-Chairs of the Board are Independent Trustees, and the Chair of each Board committee (each, a “Committee”) is an Independent Trustee. The Board has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee. The role of the Co-Chairs of the Board is to preside at all meetings of the Board and to act as a liaison with service providers, officers, attorneys, and other Trustees generally between meetings. The Chair of each Committee performs a similar role with respect to the Committee. The Co-Chairs of the Board or the Chair of a Committee may also perform such other functions as may be delegated by the Board or the Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund management, in executive session or with other service providers to the Funds. The Board has regular meetings five times a year, and may hold special meetings if required before its next regular meeting. Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the Board and reports its findings to the Board. The Board and each standing Committee conduct annual assessments of their oversight function and structure. The Board has determined that the Board’s leadership structure is appropriate because it allows the Board to exercise independent judgment over management and to allocate areas of responsibility among Committees and the full Board to enhance effective oversight.

The Board has engaged BFA to manage the Funds on a day-to-day basis. The Board is responsible for overseeing BFA, other service providers, the operations of the Funds and associated risk in accordance with the provisions of the 1940 Act, state law, other applicable laws, the Trust’s charter, and the Funds’ investment objectives and strategies. The Board reviews, on an ongoing basis, the Funds’ performance, operations, and investment strategies and techniques. The Board also conducts reviews of BFA and its role in running the operations of the Funds.

Day-to-day risk management with respect to the Funds is the responsibility of BFA or of sub-advisers or other service providers (depending on the nature of the risk), subject to the supervision of BFA. The Funds are subject to a number of risks, including investment, compliance, operational and valuation risks, among others. While there are a number of risk management functions performed by BFA and the sub-advisers or other service providers, as applicable, it is not possible to eliminate all of the risks applicable to the Funds. Risk oversight forms part of the Board’s general oversight of the Funds and is addressed as part of various Board and Committee activities. The Board, directly or through a Committee, also reviews reports from, among others, management, the independent registered public accounting firm for the Funds, sub-advisers, and internal auditors for the investment adviser or its affiliates, as appropriate, regarding risks faced by the Funds

and management’s or the service provider’s risk functions. The Committee system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates effective oversight of compliance with legal and regulatory requirements and of the Funds’ activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the implementation and testing of the Funds’ compliance program and reports to the Board regarding compliance matters for the Funds and their service providers. The Independent Trustees have engaged independent legal counsel to assist them in performing their oversight responsibilities.

The members of the Audit Committee (the “Audit Committee”) are Kenneth L. Urish (Chair), Herbert I. London, Robert C. Robb, Jr. and Frederick W. Winter, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee are to approve the selection, retention, termination and compensation of the Trust’s independent registered public accounting firm (the “independent auditors”) and to oversee the independent auditors’ work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and independence of the independent auditors; (2) approve all audit engagement terms and fees for each Fund; (3) review the conduct and results of each independent audit of each Fund’s financial statements; (4) review any issues raised by the independent auditors or Trust management regarding the accounting or financial reporting policies and practices of each Fund and the internal controls of each Fund and certain service providers; (5) oversee the performance of each Fund’s independent auditors; (6) review and discuss with management and each Fund’s independent auditors the performance and findings of the Fund’s internal auditors; (7) discuss with Fund management its policies regarding risk assessment and risk management as such matters relate to the Fund’s financial reporting and controls; and (8) resolve any disagreements between Fund management and the independent auditors regarding financial reporting. The Board has adopted a written charter for the Audit Committee. During the Trust’s fiscal year ended December 31, 2012, the Audit Committee met four times.

The members of the Governance and Nominating Committee (the “Governance Committee”) are Dr. Matina S. Horner (Chair), Herbert I. London, Cynthia A. Montgomery, Robert C. Robb, Jr., and Toby Rosenblatt, all of whom are Independent Trustees. The principal responsibilities of the Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the Trust and recommend Independent Trustee nominees for election by shareholders or appointment by the Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board (other than the Audit Committee); (4) review and make recommendations regarding Independent Trustee compensation; and (5) monitor corporate governance matters and develop appropriate recommendations to the Board. The Governance Committee may consider nominations for the office of Trustee made by Fund shareholders as it deems appropriate. Fund shareholders who wish to recommend a nominee should send nominations to the Secretary of the Trust that include biographical information and set forth the qualifications of the proposed nominee. The Board has adopted a written charter for the Governance Committee. During the Trust’s fiscal year ended December 31, 2012, the Governance Committee met six times.

The members of the Compliance Committee (the “Compliance Committee”) are Joseph P. Platt (Chair), Rodney D. Johnson, Ian A. MacKinnon and Cynthia A. Montgomery, all of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving the Trust, the Fund-related activities of BFA and the Trust’s third party service providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the compliance policies and procedures of the Trust and its service providers and recommend changes or additions to such policies and procedures; (2) review information on and, where appropriate recommend policies concerning, the Trust’s compliance with applicable law; and (3) review reports from, oversee the annual performance review of, and make certain recommendations regarding the Trust’s Chief Compliance Officer. The Board has adopted a written charter for the Compliance Committee. During the Trust’s fiscal year ended December 31, 2012, the Compliance Committee met eight times.

The members of the Performance Oversight and Contract Committee (the “Performance Oversight Committee”) are David O. Beim (Chair), Ronald W. Forbes, Ian A. MacKinnon, Toby Rosenblatt and

Frederick W. Winter, all of whom are Independent Trustees. The Performance Oversight Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee each Fund’s investment performance relative to its agreed-upon performance objectives and to assist the Independent Trustees in their consideration of investment advisory agreements. The Performance Oversight Committee’s responsibilities include, without limitation, to (1) review each Fund’s investment objectives, policies and practices and each Fund’s investment performance; (2) review information on appropriate benchmarks and competitive universes and unusual or exceptional investment matters; (3) review personnel and resources devoted to management of each Fund and evaluate the nature and quality of information furnished to the Performance Oversight Committee; (4) recommend any required action regarding change in fundamental and non-fundamental investment policies and restrictions, Fund mergers or liquidations; (5) request and review information on the nature, extent and quality of services provided to the shareholders; and (6) make recommendations to the Board concerning the approval or renewal of investment advisory agreements. The Board has adopted a written charter for the Performance Oversight Committee. During the Trust’s fiscal year ended December 31, 2012, the Performance Oversight Committee met five times.

The members of the Executive Committee (the “Executive Committee”) are Ronald W. Forbes and Rodney D. Johnson, both of whom are Independent Trustees and Paul L. Audet, who serves as an interested Trustee. The principal responsibilities of the Executive Committee are to (1) act on routine matters between meetings of the Board; (2) act on such matters as may require urgent action between meetings of the Board; and (3) exercise such other authority as may from time to time be delegated to the Executive Committee by the Board. The Board has adopted a written charter for the Executive Committee. During the Trust’s fiscal year ended December 31, 2012, the Executive Committee of certain funds in the Equity-Liquidity Complex held two formal meetings. The Executive Committee has met informally numerous times throughout the fiscal year.

The Governance Committee has adopted a statement of policy that describes the experience, qualifications, skills and attributes that are necessary and desirable for potential Independent Trustee candidates (the “Statement of Policy”). The Board believes that each Independent Trustee satisfied, at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. Furthermore, in determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, skills, attributes and qualifications, which allow the Board to operate effectively in governing the Trust and protecting the interests of shareholders. Among the attributes common to all Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with the Funds’ investment adviser, sub-advisers, other service providers, counsel and independent auditors, and to exercise effective business judgment in the performance of their duties as Trustees.

Each Trustee’s ability to perform his or her duties effectively is evidenced by his or her educational background or professional training; business, consulting, public service or academic positions; experience from service as a board member of the Trust and the other funds in the BlackRock Fund Complex (and any predecessor funds), other investment funds, public companies, or non-profit entities or other organizations; ongoing commitment and participation in Board and committee meetings, as well as his or her leadership of standing and ad hoc committees throughout the years; or other relevant life experiences.

The table below discusses some of the experiences, qualifications and skills of each of the Trustees that support the conclusion that each Trustee should serve (or continue to serve) on the Board.


Trustees		Experience, Qualifications and Skills

Independent Trustees

David O. Beim		David O. Beim has served for approximately 14 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. Mr. Beim has served as a professor of finance and economics at the Columbia University Graduate School of Business since 1991 and has taught courses on corporate finance, international banking and emerging financial markets. The Board benefits from the perspective and background gained by his almost 20 years of academic experience. He has published numerous articles and books on a range of topics, including, among others, banking and finance. In addition, Mr. Beim spent 25 years in investment banking, including starting and running the investment banking business at Bankers Trust Company.

Ronald W. Forbes		Ronald W. Forbes has served for more than 30 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. This length of service provides Mr. Forbes with direct knowledge of the operation of the Funds and the business and regulatory issues facing the Funds. He currently serves as professor emeritus at the School of Business at the State University of New York at Albany, and has served as a professor of finance thereof since 1989. Mr. Forbes’ experience as a professor of finance provides valuable background for his service on the boards. Mr. Forbes has also served as a member of the task force on municipal securities markets for Twentieth Century Fund.

Dr. Matina S. Horner		Dr. Matina S. Horner has served for over eight years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from her service as executive vice president of Teachers Insurance and Annuity Association and College Retirement Equities Fund. This experience provides Dr. Horner with management and corporate governance experience. In addition, Dr. Horner served as a professor in the Department of Psychology at Harvard University and served as president of Radcliffe College for 17 years. Dr. Horner also served on various public, private and non-profit boards.

Rodney D. Johnson		Rodney D. Johnson has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 25 years of experience as a financial advisor covering a range of engagements, which has broadened his knowledge of and experience with the investment management business. Prior to founding Fairmount Capital Advisors, Inc., Mr. Johnson served as Chief Financial Officer of Temple University for four years. He served as Director of Finance and Managing Director, in addition to a variety of other roles, for the City of Philadelphia, and has extensive experience in municipal finance. Mr. Johnson was also a tenured associate professor of finance at Temple University and a research economist with the Federal Reserve Bank of Philadelphia.

Herbert I. London		Herbert I. London has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. Dr. London’s experience as president of the Hudson Institute, a world renowned think tank in Washington D.C., since 1997; and in various positions at New York University provide both background and perspective on financial, economic and global issues, which enhance his service on the Board. He has authored several books and numerous articles, which have appeared in major newspapers and journals throughout the United States.

Ian A. MacKinnon		Ian A. MacKinnon recently joined as a member of the boards of the funds in the Equity-Liquidity Complex. Mr. MacKinnon spent over 25 years in fixed income investing. He served over 20 years as a portfolio manager at The Vanguard Group and was managing director and head of the Vanguard Fixed Income Group. The Board benefits from the perspective and experiences he has gained over 25 years in portfolio management and his expertise in the fixed income markets. Mr. MacKinnon has also served as a board member of the Municipal Securities Rulemaking Board.

Cynthia A. Montgomery		Cynthia A. Montgomery has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. The Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at Harvard Business School where she taught courses on corporate strategy and corporate governance. Ms. Montgomery also has business management and corporate governance experience through her service on the corporate boards of a variety of public companies. She has also authored numerous articles and books on these topics.

Joseph P. Platt		Joseph P. Platt has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Platt currently serves as general partner at Thorn Partners, LP, a private investment company. Prior to his joining Thorn Partners, LP, he was an owner, director and executive vice president with Johnson and Higgins, an insurance broker and employee benefits consultant. He has over 25 years experience in the areas of insurance, compensation and benefits. Mr. Platt also serves on the boards of public, private and non-profit companies.

Robert C. Robb, Jr.		Robert C. Robb, Jr. has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Robb has over 30 years of experience in management consulting and has worked with many companies and business associations located throughout the United States. Mr. Robb brings to the Board a wealth of practical business experience across a range of industries.


Trustees		Experience, Qualifications and Skills

Toby Rosenblatt		Toby Rosenblatt has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has served as president and general partner of Founders Investments, Ltd., a private investment limited partnership, since 1999, providing him with relevant experience with the issues faced by investment management firms and their clients. Mr. Rosenblatt has been active in the civic arena and has served as a trustee of a number of community and educational organizations for over 30 years.

Kenneth L. Urish		Kenneth L. Urish has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 30 years of experience in public accounting. Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable SEC rules.

Frederick W. Winter		Frederick W. Winter has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from Mr. Winter’s years of academic experience, having served as a professor and dean emeritus of the Joseph M. Katz Graduate School of Business at the University of Pittsburgh since 2005, and dean thereof from 1997 to 2005. He is widely regarded as a specialist in marketing strategy, marketing management, business-to-business marketing and services marketing. He has also served as a consultant to more than 50 different firms.

Interested Trustees

Paul L. Audet		Paul L. Audet has a wealth of experience in the investment management industry, including more than 13 years with BlackRock and over 30 years in finance and asset management. His expertise in finance is demonstrated by his positions as Chief Financial Officer of BlackRock and head of BlackRock’s Global Cash Management business. Mr. Audet currently is a member of BlackRock’s Global Operating and Corporate Risk Management Committees, the BlackRock Alternative Investors Executive Committee and the Investment Committee for the Private Equity Fund of Funds. Prior to joining BlackRock, Mr. Audet was the Senior Vice President of Finance at PNC Bank Corp. and Chief Financial Officer of the investment management and mutual fund processing businesses and Head of PNC’s Mergers and Acquisitions unit.

Henry Gabbay		Henry Gabbay’s many years of experience in finance provide the Board with a wealth of practical business knowledge and leadership. In particular, Mr. Gabbay’s experience as a Consultant for and Managing Director of BlackRock, Inc., Chief Administrative Officer of BlackRock and President of BlackRock Funds provides the Funds with greater insight into the analysis and evaluation of both their existing investment portfolios and potential future investments as well as enhanced oversight of its investment decisions and investment valuation processes. In addition, Mr. Gabbay’s former positions as Chief Administrative Officer of BlackRock and as Treasurer of certain closed-end funds in the BlackRock Fund Complexes provide the Board with direct knowledge of the operations of the Funds and their investment adviser. Mr. Gabbay’s previous service on and long-standing relationship with the Board also provides him with a specific understanding of the Funds, their operations, and the business and regulatory issues facing the Funds.

Certain biographical and other information relating to the Trustees of the Trust is set forth below, including address and year of birth, principal occupations for at least the last five years, length of time served, total number of registered investment companies and portfolios overseen in the BlackRock-advised Funds and any currently held public company and investment company directorships:


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Serve d ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Independent Trustees ¹

David O. Beim ³ 55 East 52nd Street New York, NY 10055 1940	Trustee	2009 to present	Professor of Professional Practice at the Columbia University Graduate School of Business since 1991; Trustee, Phillips Exeter Academy from 2002 to 2012; Chairman, Wave Hill, Inc. (public garden and cultural center) from 1990 to 2006.	33 RICs consisting of 107 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Serve d ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Ronald W. Forbes ⁴ 55 East 52nd Street New York, NY 10055 1940	Trustee	2009 to present	Professor Emeritus of Finance, School of Business, State University of New York at Albany since 2000.	33 RICs consisting of 107 Portfolios	None

Dr. Matina S. Horner ⁵ 55 East 52nd Street New York, NY 10055 1939	Trustee	2009 to present	Executive Vice President of Teachers Insurance and Annuity Association and College Retirement Equities Fund from 1989 to 2003.	33 RICs consisting of 107 Portfolios	NSTAR (electric and gas utility)

Rodney D. Johnson ⁴ 55 East 52nd Street New York, NY 10055 1941	Trustee	2009 to present	President, Fairmont Capital Advisors, Inc. since 1987; Member of Archdiocesan Investment Committee of the Archdiocese of Philadelphia from 2004 to 2012; Director, The Committee of Seventy (civic) from 2006 to 2012; Director, Fox Chase Cancer Center from 2004 to 2011.	33 RICs consisting of 107 Portfolios	None

Herbert I. London 55 East 52nd Street New York, NY 10055 1939	Trustee	2009 to present	Professor Emeritus, New York University since 2005; John M. Olin Professor of Humanities, New York University from 1993 to 2005 and Professor thereof from 1980 to 2005; President Emeritus, Hudson Institute (policy research organization) from 2011 to 2012, President thereof from 1997 to 2011 and Trustee from 1980 to 2012; Chairman of the Board of Trustees for Grantham University since 2006; Director, InnoCentive, Inc. (global internet service) since 2005; Director, Cerego, LLC (educational software) since 2005; Director, Cybersettle (online adjudication) since 2009; Director, AIMS Worldwide, Inc. from 2007 to 2012.	33 RICs consisting of 107 Portfolios	None

Ian A. MacKinnon 55 East 52nd Street New York, NY 10055 1948	Trustee	2012 to present	Director, Kennett Capital, Inc. (investments) since 2006; Director, Free Library of Philadelphia from 1999 to 2008.	33 RICs consisting of 107 Portfolios	None

Cynthia A. Montgomery 55 East 52nd Street New York, NY 10055 1952	Trustee	2009 to present	Professor, Harvard Business School since 1989; Director, McLean Hospital from 2005 to 2012; Director, Harvard Business School Publishing from 2005 to 2010.	33 RICs consisting of 107 Portfolios	Newell Rubbermaid, Inc. (manufacturing)

Joseph P. Platt ⁶ 55 East 52nd Street New York, NY 10055 1947	Trustee	2009 to present	Director, Jones and Brown (Canadian insurance broker) since 1998; Director, The West Penn Allegheny Health System (a not-for-profit health system) since 2008; General Partner, Thorn Partner, LP (private investment) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Partner, Amarna Corporation, LLC (private investment company) from 2002 to 2008.	33 RICs consisting of 107 Portfolios	Greenlight Capital Re, Ltd. (reinsurance company)

Robert C. Robb, Jr. 55 East 52nd Street New York, NY 10055 1945	Trustee	2009 to present	Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981.	33 RICs consisting of 107 Portfolios	None

Toby Rosenblatt 55 East 52nd Street New York, NY 10055 1938	Trustee	2009 to present	President, Founders Investments Ltd. (private investments) since 1999; Director, Forward Management, LLC since 2007; Director, College Access Foundation of California (philanthropic foundation) since 2009; Director, A.P. Pharma, Inc. (pharmaceuticals) from 1983 to 2011; Director, the James Irvine Foundation (philanthropic foundation) from 1998 to 2008.	33 RICs consisting of 107 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Serve d ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Kenneth L. Urish ⁷ 55 East 52nd Street New York, NY 10055 1951	Trustee	2009 to present	Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants since 2010 and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since 2001; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007.	33 RICs consisting of 107 Portfolios	None

Frederick W. Winter 55 East 52nd Street New York, NY 10055 1945	Trustee	2009 to present	Professor and Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh since 2005 and Dean thereof from 1997 to 2005; Director, Alkon Corporation (pneumatics) since 1992; Director, Tippman Sports (recreation) since 2005; Director, Indotronix International (IT services) from 2004 to 2008.	33 RICs consisting of 107 Portfolios	None

Interested Trustees ^1,8

Paul L. Audet 55 East 52nd Street New York, NY 10055 1953	Trustee	2011 to present	Senior Managing Director of BlackRock and Head of U.S. Mutual Funds since 2011; Chair of the U.S. Mutual Funds Committee reporting to the Global Executive Committee since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees and of the BlackRock Alternative Investors Executive Committee and Investment Committee for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005.	155 RICs consisting of 280 Portfolios	None

Henry Gabbay 55 East 52nd Street New York, NY 10055 1947	Trustee	2009 to present	Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007 and Treasurer of certain closed- end funds in the BlackRock fund complex from 1989 to 2006.	155 RICs consisting of 280 Portfolios	None

Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The Board of Trustees has approved one-year extensions in the terms of Trustees who turn 72 prior to December 31, 2013.

In connection with the acquisition of Barclays Global Investors by BlackRock, Inc. in December 2009, the Trustees were elected to the Trust’s Board. As a result, although the chart shows the Independent Trustees as joining the Trust’s Board in 2009, those Independent Trustees first became members of the boards of other funds advised by BlackRock Advisors, LLC or its affiliates as follows: David O. Beim, 1998; Ronald W. Forbes, 1977; Dr. Matina S. Horner, 2004; Rodney D. Johnson, 1995; Herbert I. London, 1987; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Robert C. Robb, Jr., 1999; Toby Rosenblatt, 2005; Kenneth L. Urish, 1999; and Frederick W. Winter, 1999.

Chair of the Performance Oversight Committee.

⁴

Co-Chair of the Board.

⁵

Chair of the Governance Committee.

⁶

Chair of the Compliance Committee.

⁷

Chair of the Audit Committee.

⁸

Mr. Audet is an “interested person,” as defined in the 1940 Act, of the Trust based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Trust based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities.

Certain biographical and other information relating to the officers of the Trust is set forth below, including address and year of birth, principal occupations for at least the last five years, length of time served, total number of registered investment companies and portfolios overseen in the BlackRock-advised Funds and any currently held public company and investment company directorships:


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ¹	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

John M. Perlowski 55 East 52nd Street New York, NY 10055 1964	President and Chief Executive Officer	2010 to present	Managing Director of BlackRock, Inc. since 2009; Global Head of BlackRock Fund Administration since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.	155 RICs consisting of 280 Portfolios	None

Richard Hoerner, CFA 55 East 52nd Street New York, NY 10055 1958	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2000; Head of the Global Cash Group since 2013; Co-head of the Global Cash and Securities Lending Group from 2010 to 2013; Member of the Cash Management Group Executive Committee since 2005.	24 RICs consisting of 94 Portfolios	None

Brendan Kyne 55 East 52nd Street New York, NY 10055 1977	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009 and Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.	155 RICs consisting of 280 Portfolios	None

Christopher Stavrakos, CFA 55 East 52nd Street New York, NY 10055 1959	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2006; Co-head of BlackRock’s Cash Management Portfolio Management Group since 2006; Senior Vice President, CIO, and Director of Liability Management for the Securities Lending Group at Mellon Bank from 1999 to 2006.	24 RICs consisting of 94 Portfolios	None

Neal J. Andrews 55 East 52nd Street New York, NY 10055 1966	Chief Financial Officer and Assistant Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.	155 RICs consisting of 280 Portfolios	None

Jay M. Fife 55 East 52nd Street New York, NY 10055 1970	Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.	155 RICs consisting of 280 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ¹	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Brian P. Kindelan 55 East 52nd Street New York, NY 10055 1959	Chief Compliance Officer and Anti-Money Laundering Officer	2009 to present	Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005.	155 RICs consisting of 280 Portfolios	None

Benjamin Archibald 55 East 52nd Street New York, NY 10055 1975	Secretary	2012 to present	Director of BlackRock, Inc. since 2010; Assistant Secretary to the Trust from 2010 to 2012; General Counsel and Chief Operating Officer of Uhuru Capital Management from 2009 to 2010; Executive Director and Counsel of Goldman Sachs Asset Management from 2005 to 2009.	62 RICs consisting of 191 Portfolios	None

Officers of the Trust serve at the pleasure of the Board of Trustees.

Share Ownership Information. Information relating to each Trustee’s share ownership in the Funds and in all BlackRock-advised Funds that are overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2012 is set forth in the chart below:

Dollar Range of Equity Securities

Aggregate Dollar
Range of
Securities in the
Supervised Funds

Trustees

BlackRock
Cash Funds:
Government

BlackRock
Cash
Funds:
Institutional

BlackRock
Cash
Funds:
Prime

BlackRock
Cash Funds:
Treasury

Interested Trustees:

Paul L. Audet

None

Over $100,000

Henry Gabbay

None

Over $100,000

Independent Trustees:

David O. Beim

None

Over $100,000

Ronald W. Forbes

None

Over $100,000

Dr. Matina S. Horner

None

Over $100,000

Rodney D. Johnson

None

Over $100,000

Herbert I. London

None

$50,001-$100,000

Ian A. MacKinnon

None

Over $100,000

Cynthia A. Montgomery

None

Over $100,000

Joseph P. Platt

None

Over $100,000

Robert C. Robb, Jr.

None

Over $100,000

Toby Rosenblatt

None

Over $100,000

Kenneth L. Urish

None

Over $100,000

Frederick W. Winter

None

Over $100,000

Ownership of Securities of Certain Entities. As of April 1, 2013, the Trustees and officers of the Trust as a group owned an aggregate of less than 1% of any class of the outstanding shares of any Fund. As of December 31, 2012, none of the Independent Trustees or their immediate family members owned beneficially or of record any securities of affiliates of the Investment Adviser.

Compensation of Trustees. Each current Trustee who is an Independent Trustee is paid as compensation an annual retainer of $275,000 per year for his or her services as a Board member to the BlackRock-advised Funds in the Equity-Liquidity Complex, including the Trust and MIP, and a $5,000 Board meeting fee to be paid for each in-person Board meeting attended (a $2,500 Board meeting fee for telephonic attendance at regular Board meetings), for up to five Board meetings held in a calendar year (compensation for meetings in excess of this number to be determined on a case-by-case basis), together with out-of-pocket expenses in accordance with a Board policy on travel and other business expenses relating to attendance at meetings. Each Independent Trustee receives $10,000 per year for each standing Committee on which he or she serves for up to two standing Committee assignments but is not paid this amount for serving on a Committee which he or she chairs. The Co-Chairs of the Boards of Trustees are each paid an additional annual retainer of $60,000. The Chair of the Audit Committees is paid an additional annual retainer of $40,000 and the Chairs of the Compliance Committees, Governance Committees and Performance Oversight Committees are each paid an additional annual retainer of $30,000.

Mr. Gabbay is an interested Trustee of the Trust and serves as an interested board member of the other funds which comprise the Equity-Liquidity, the Equity-Bond and the Closed-End Complexes. Mr. Gabbay receives as compensation for his services as a board member of each of these three BlackRock Fund Complexes, (i) an annual retainer of $550,000, paid quarterly in arrears, allocated to the BlackRock-advised Funds in these three BlackRock Fund Complexes, including the Trust and MIP, and (ii) with respect to each of the two open-end BlackRock Fund Complexes, a board meeting fee of $3,750 (with respect to meetings of the Equity-Liquidity Complex) and $18,750 (with respect to meetings of the Equity-Bond Complex) to be paid for attendance at each board meeting up to five board meetings held in a calendar year by each such Complex (compensation for meetings in excess of this number to be determined on a case-by-case basis). Mr. Gabbay will also be reimbursed for out-of-pocket expenses in accordance with a Board policy on travel and other business expenses relating to attendance at meetings. Mr. Gabbay’s compensation for serving on the boards of funds in these three BlackRock Fund Complexes (including the Trust and MIP) is equal to 75% of each retainer and, as applicable, of each meeting fee (without regard to additional fees paid to Board and Committee chairs) received by the independent board members serving on such boards. The Board or any other BlackRock-advised Fund may modify the board members’ compensation from time to time depending on market conditions and Mr. Gabbay’s compensation would be impacted by those modifications.

The following table sets forth the compensation earned by the Trustees from the Master Portfolios for the fiscal year ended December 31, 2012 and the aggregate compensation paid to them by all BlackRock-advised Funds for the calendar year ended December 31, 2012. The Trustees received no additional compensation from the Trust with respect to the Funds.


Name	Money Market Master Portfolio	Prime Money Market Master Portfolio	Government Money Market Master Portfolio	Treasury Money Market Master Portfolio	Aggregate Compensation from the Master Portfolios and Other BlackRock- Advised Funds ¹

Independent Trustees:

David O. Beim ²	$28,958	$9,532	$250	$2,025	$300,000

Ronald W. Forbes ³	$31,741	$10,453	$251	$2,205	$326,250

Dr. Matina S. Horner ⁴	$28,958	$9,532	$250	$2,025	$300,000

Rodney D. Johnson ³	$31,741	$10,453	$251	$2,205	$326,250

Herbert I. London	$26,348	$8,687	$249	$1,863	$275,000

Ian A. MacKinnon	$17,769	$5,613	$151	$1,297	$172,967

Cynthia A. Montgomery	$26,348	$8,687	$249	$1,863	$275,000

Joseph P. Platt ⁶	$29,881	$9,828	$202	$2,046	$313,750

Robert C. Robb, Jr.	$26,348	$8,687	$249	$1,863	$275,000

Toby Rosenblatt ⁷	$28,935	$9,509	$226	$2,002	$297,500

Kenneth L. Urish ⁸	$28,958	$9,532	$250	$2,025	$310,000

Frederick W. Winter	$26,348	$8,687	$249	$1,863	$275,000

Name

Money Market
Master Portfolio

Prime
Money Market
Master Portfolio

Government
Money Market
Master Portfolio

Treasury
Money Market
Master Portfolio

Aggregate
Compensation
from the Master
Portfolios and
Other BlackRock-
Advised Funds ¹

Interested Trustees:

Paul L. Audet

None

Henry Gabbay

$20,267

$7,055

$187

$1,508

$641,250

For the number of BlackRock-advised RICs and Portfolios from which each Trustee receives compensation, see the Biographical Information chart beginning on page 21.

Chair of the Performance Oversight Committee.

Co-Chair of the Board.

⁴

Chair of the Governance Committee.

⁵

Mr. MacKinnon was appointed to serve as a Trustee of the Trust and as a director or trustee of all of the other funds in the Equity-Liquidity Complex effective May 14, 2012.

⁶

Chair of the Compliance Committee.

⁷

Mr. Rosenblatt served as Vice Chair of the Performance Oversight Committee for the year ended December 31, 2012 for which he was paid an annual retainer of $25,000.

⁸

Chair of the Audit Committee.

Codes of Ethics . The Trust, BFA and BlackRock Investments, LLC, the Funds’ distributor (the “Distributor”) have adopted Codes of Ethics pursuant to Rule 17j-1 under the 1940 Act. The Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, subject to certain limitations, including securities that may be purchased or held by the Funds. The Codes of Ethics are on public file with, and are available from, the SEC.

Proxy Voting Policies of the Master Portfolios . The Board of Trustees of MIP has delegated the voting of proxies for each Master Portfolio’s securities to BFA pursuant to MIP’s proxy voting guidelines. Under these guidelines, BFA will vote proxies related to the securities held by each Master Portfolio in the best interests of the Master Portfolio and its stockholders. From time to time, a vote may present a conflict between the interests of the Master Portfolio’s stockholders, on the one hand, and those of BFA, or any affiliated person of MIP or BFA, on the other. In such event, provided that BlackRock’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Committee”) is aware of the real or potential conflict or material non-routine matter and if the Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Committee may retain an independent fiduciary to advise the Committee on how to vote or to cast votes on behalf of BFA’s clients. If BFA determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Committee shall determine how to vote the proxy after consulting with BlackRock’s Portfolio Management Group and/or BlackRock’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of MIP’s Proxy Voting Policies is attached as Appendix A.

Information on how a Master Portfolio voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

Shareholder Communication to the Board of Trustees . The Board of Trustees has established a process for shareholders to communicate with the Board of Trustees. Shareholders may contact the Board of Trustees by mail. Correspondence should be addressed to BlackRock Funds III Board of Trustees, c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055. Shareholder communication to the Board of Trustees should include the following information: (a) the name and address of the shareholder; (b) the number of shares owned by the shareholder; (c) the Fund(s) of which the shareholder owns shares; and (d) if these shares are owned indirectly through a broker, financial intermediary or other record owner, the name of the broker, financial intermediary or other record owner. All correspondence received as set forth above shall be reviewed by the Secretary of the Trust and reported to the Board of Trustees.

be an affiliate of BlackRock, Inc., under the 1940 Act. Certain activities of BFA, BlackRock Advisors, LLC, BlackRock, Inc. and their affiliates (collectively, “BlackRock”) and PNC and its affiliates (collectively, “PNC” and together with BlackRock, “Affiliates”), with respect to the Funds and/or other accounts managed by BlackRock or PNC, may give rise to actual or perceived conflicts of interest such as those described below.

BlackRock is one of the world’s largest asset management firms. PNC is a diversified financial services organization spanning the retail, business and corporate markets. Barclays is a major global financial services provider engaged in a range of activities including retail and commercial banking, credit cards, investment banking, and wealth management. BlackRock, PNC, Barclays and their respective affiliates (including, for these purposes, their directors, partners, trustees, managing members, officers and employees), including the entities and personnel who may be involved in the investment activities and business operations of a Fund, are engaged worldwide in businesses, including equity, fixed income, cash management and alternative investments, and have interests other than those of managing the Funds. These are considerations of which investors in a Fund should be aware, and which may cause conflicts of interest that could disadvantage the Fund and its shareholders. These activities and interests include potential multiple advisory, transactional, financial and other interests in securities and other instruments, and companies that may be purchased or sold by a Fund.

BlackRock and its Affiliates have proprietary interests in, and may manage or advise with respect to, accounts or funds (including separate accounts and other funds and collective investment vehicles) that have investment objectives similar to those of a Fund and/or that engage in transactions in the same types of securities, currencies and instruments as the Fund. One or more Affiliates are also major participants in the global currency, equities, swap and fixed income markets, in each case both on a proprietary basis and for the accounts of customers. As such, one or more Affiliates are or may be actively engaged in transactions in the same securities, currencies, and instruments in which a Fund invests. Such activities could affect the prices and availability of the securities, currencies, and instruments in which a Fund invests, which could have an adverse impact on the Fund’s performance. Such transactions, particularly in respect of most proprietary accounts or customer accounts, will be executed independently of a Fund’s transactions and thus at prices or rates that may be more or less favorable than those obtained by the Fund. When BlackRock and its Affiliates seek to purchase or sell the same assets for their managed accounts, including a Fund, the assets actually purchased or sold may be allocated among the accounts on a basis determined in their good faith discretion to be equitable. In some cases, this system may adversely affect the size or price of the assets purchased or sold for a Fund. In addition, transactions in investments by one or more other accounts managed by BlackRock or its Affiliates may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of a Fund, particularly, but not limited to, with respect to small capitalization, emerging market or less liquid strategies. This may occur when investment decisions regarding a Fund are based on research or other information that is also used to support decisions for other accounts. When BlackRock or its Affiliates implements a portfolio decision or strategy on behalf of another account ahead of, or contemporaneously with, similar decisions or strategies for a Fund, market impact, liquidity constraints, or other factors could result in the Fund receiving less favorable trading results and the costs of implementing such decisions or strategies could be increased or the Fund could otherwise be disadvantaged. BlackRock or its Affiliates may, in certain cases, elect to implement internal policies and procedures designed to limit such consequences, which may cause a Fund to be unable to engage in certain activities, including purchasing or disposing of securities, when it might otherwise be desirable for it to do so.

Conflicts may also arise because portfolio decisions regarding a Fund may benefit other accounts managed by BlackRock or its Affiliates. For example, the sale of a long position or establishment of a short position by a Fund may impair the price of the same security sold short by (and therefore benefit) one or more Affiliates or their other accounts, and the purchase of a security or covering of a short position in a security by a Fund may increase the price of the same security held by (and therefore benefit) one or more Affiliates or their other accounts.

Affiliates or their clients, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.

The results of a Fund’s investment activities may differ significantly from the results achieved by BlackRock and its Affiliates for their proprietary accounts or other accounts (including investment companies or collective investment vehicles) managed or advised by them. It is possible that one or more Affiliate-managed accounts and such other accounts will achieve investment results that are substantially more or less favorable than the results achieved by a Fund. Moreover, it is possible that a Fund will sustain losses during periods in which one or more Affiliates achieve significant profits on their trading for proprietary or other accounts. The opposite result is also possible. The investment activities of one or more Affiliates for their proprietary accounts and accounts under their management may also limit the investment opportunities for a Fund in certain emerging and other markets in which limitations are imposed upon the amount of investment, in the aggregate or in individual issuers, by affiliated foreign investors.

From time to time, a Fund’s activities may also be restricted because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. As a result, there may be periods, for example, when BlackRock, and/or one or more Affiliates, will not initiate or recommend certain types of transactions in certain securities or instruments with respect to which BlackRock and/or one or more Affiliates are performing services or when position limits have been reached.

In connection with its management of a Fund, BlackRock may have access to certain fundamental analysis and proprietary technical models developed by one or more Affiliates. BlackRock will not be under any obligation, however, to effect transactions on behalf of a Fund in accordance with such analysis and models. In addition, neither BlackRock nor any of its Affiliates, will have any obligation to make available any information regarding their proprietary activities or strategies, or the activities or strategies used for other accounts managed by them, for the benefit of the management of a Fund and it is not anticipated that BlackRock will have access to such information for the purpose of managing the Fund. The proprietary activities or portfolio strategies of BlackRock and its Affiliates, or the activities or strategies used for accounts managed by them or other customer accounts could conflict with the transactions and strategies employed by BlackRock in managing a Fund.

In addition, certain principals and certain employees of BlackRock are also principals or employees of another Affiliate. As a result, the performance by these principals and employees of their obligations to such other entities may be a consideration of which investors in a Fund should be aware.

BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of a Fund in which customers of BlackRock or its Affiliates, or, to the extent permitted by the SEC, BlackRock or another Affiliate, serves as the counterparty, principal or issuer. In such cases, such party’s interests in the transaction will be adverse to the interests of the Fund, and such party may have no incentive to assure that the Fund obtains the best possible prices or terms in connection with the transactions. In addition, the purchase, holding and sale of such investments by a Fund may enhance the profitability of BlackRock or its Affiliates. One or more Affiliates may also create, write or issue derivatives for their customers, the underlying securities, currencies or instruments of which may be those in which a Fund invests or which may be based on the performance of the Fund. A Fund may, subject to applicable law, purchase investments that are the subject of an underwriting or other distribution by one or more Affiliates and may also enter into transactions with other clients of an Affiliate where such other clients have interests adverse to those of the Fund.

At times, these activities may cause departments of BlackRock or its Affiliates to give advice to clients that may cause these clients to take actions adverse to the interests of the Fund. To the extent affiliated transactions are permitted, a Fund will deal with BlackRock and its Affiliates on an arms-length basis. BlackRock or its Affiliates may also have an ownership interest in certain trading or information systems used by a Fund. A Fund’s use of such trading or information systems may enhance the profitability of BlackRock and its Affiliates.

and placement fees, sales fees, financing and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions charged by an Affiliate will be in its view commercially reasonable, although each Affiliate, including its sales personnel, will have an interest in obtaining fees and other amounts that are favorable to the Affiliate and such sales personnel.

Subject to applicable law, the Affiliates (and their personnel and other distributors) will be entitled to retain fees and other amounts that they receive in connection with their service to the Funds as broker, dealer, agent, lender, adviser or in other commercial capacities and no accounting to the Funds or their shareholders will be required, and no fees or other compensation payable by the Funds or their shareholders will be reduced by reason of receipt by an Affiliate of any such fees or other amounts.

When an Affiliate acts as broker, dealer, agent, adviser or in other commercial capacities in relation to the Funds, the Affiliate may take commercial steps in its own interests, which may have an adverse effect on the Funds. A Fund will be required to establish business relationships with its counterparties based on the Fund’s own credit standing. Neither BlackRock nor any of the Affiliates, will have any obligation to allow their credit to be used in connection with a Fund’s establishment of its business relationships, nor is it expected that the Fund’s counterparties will rely on the credit of BlackRock or any of the Affiliates in evaluating the Fund’s creditworthiness.

Purchases and sales of securities for a Fund may be bunched or aggregated with orders for other BlackRock client accounts. BlackRock and its Affiliates, however, are not required to bunch or aggregate orders if portfolio management decisions for different accounts are made separately, or if they determine that bunching or aggregating is not practicable, required or with cases involving client direction.

Prevailing trading activity frequently may make impossible the receipt of the same price or execution on the entire volume of securities purchased or sold. When this occurs, the various prices may be averaged, and the Funds will be charged or credited with the average price. Thus, the effect of the aggregation may operate on some occasions to the disadvantage of the Funds. In addition, under certain circumstances, the Funds will not be charged the same commission or commission equivalent rates in connection with a bunched or aggregated order.

BlackRock may select brokers (including, without limitation, Affiliates) that furnish BlackRock, the Funds, other BlackRock client accounts or other Affiliates or personnel, directly or through correspondent relationships, with research or other appropriate services which provide, in BlackRock’s view, appropriate assistance to BlackRock in the investment decision-making process (including with respect to futures, fixed-price offerings and over-the-counter transactions). Such research or other services may include, to the extent permitted by law, research reports on companies, industries and securities; economic and financial data; financial publications; proxy analysis; trade industry seminars; computer data bases; research-oriented software and other services and products. Research or other services obtained in this manner may be used in servicing any or all of the Funds and other BlackRock client accounts, including in connection with BlackRock client accounts other than those that pay commissions to the broker relating to the research or other service arrangements. Such products and services may disproportionately benefit other BlackRock client accounts relative to the Funds based on the amount of brokerage commissions paid by the Funds and such other BlackRock client accounts. For example, research or other services that are paid for through one client’s commissions may not be used in managing that client’s account. In addition, other BlackRock client accounts may receive the benefit, including disproportionate benefits, of economies of scale or price discounts in connection with products and services that may be provided to the Funds and to such other BlackRock client accounts. To the extent that BlackRock uses soft dollars, it will not have to pay for those products and services itself.

BlackRock may receive research that is bundled with the trade execution, clearing, and/or settlement services provided by a particular broker-dealer. To the extent that BlackRock receives research on this basis, many of the same conflicts related to traditional soft dollars may exist. For example, the research effectively will be paid by client commissions that also will be used to pay for the execution, clearing, and settlement services provided by the broker-dealer and will not be paid by BlackRock.

BlackRock may endeavor to execute trades through brokers who, pursuant to such arrangements, provide research or other services in order to ensure the continued receipt of research or other services BlackRock believes are useful in its investment decision-making process. BlackRock may from time to time choose not to engage in the above described arrangements to varying degrees. BlackRock may also enter into commission sharing arrangements under which BlackRock may execute transactions through a broker-dealer, including, where permitted, an Affiliate, and request that the broker-dealer allocate a portion of the commissions or commission credits to another firm that provides research to BlackRock. To the extent that BlackRock engages in commission sharing arrangements, many of the same conflicts related to traditional soft dollars may exist.

BlackRock may utilize certain electronic crossing networks (“ECNs”) in executing client securities transactions for certain types of securities. These ECNs may charge fees for their services, including access fees and transaction fees. The transaction fees, which are similar to commissions or markups/markdowns, will generally be charged to clients and, like commissions and markups/markdowns, would generally be included in the cost of the securities purchased. Access fees may be paid by BlackRock even though incurred in connection with executing transactions on behalf of clients, including the Funds. In certain circumstances, ECNs may offer volume discounts that will reduce the access fees typically paid by BlackRock. This would have the effect of reducing the access fees paid by BlackRock. BlackRock will only utilize ECNs consistent with its obligation to seek to obtain best execution in client transactions.

BlackRock has adopted policies and procedures designed to prevent conflicts of interest from influencing proxy voting decisions that it makes on behalf of advisory clients, including the Funds, and to help ensure that such decisions are made in accordance with BlackRock’s fiduciary obligations to its clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting decisions of BlackRock may have the effect of favoring the interests of other clients or businesses of other divisions or units of BlackRock and/or its Affiliates, provided that BlackRock believes such voting decisions to be in accordance with its fiduciary obligations. For a more detailed discussion of these policies and procedures, see “Proxy Voting Policies of the Master Portfolios.”

It is also possible that, from time to time, BlackRock or its Affiliates may, although they are not required to, purchase and hold shares of a Fund. Increasing a Fund’s assets may enhance investment flexibility and diversification and may contribute to economies of scale that tend to reduce the Fund’s expense ratio. BlackRock and its Affiliates reserve the right to redeem at any time some or all of the shares of a Fund acquired for their own accounts. A large redemption of shares of a Fund by BlackRock or its Affiliates could significantly reduce the asset size of the Fund, which might have an adverse effect on the Fund’s investment flexibility, portfolio diversification and expense ratio. BlackRock will consider the effect of redemptions on a Fund and other shareholders in deciding whether to redeem its shares.

It is possible that a Fund may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships as well as securities of entities in which BlackRock or its Affiliates has significant debt or equity investments or in which an Affiliate makes a market. A Fund also may invest in securities of companies to which an Affiliate provides or may some day provide research coverage. Such investments could cause conflicts between the interests of a Fund and the interests of other clients of BlackRock or its Affiliates. In making investment decisions for a Fund, BlackRock is not permitted to obtain or use material non-public information acquired by any division, department or Affiliate of BlackRock in the course of these activities. In addition, from time to time, the activities of an Affiliate may limit a Fund’s flexibility in purchases and sales of securities. When an Affiliate is engaged in an underwriting or other distribution of securities of an entity, BlackRock may be prohibited from purchasing or recommending the purchase of certain securities of that entity for a Fund.

BlackRock and its Affiliates, their personnel and other financial service providers have interests in promoting sales of the Funds. With respect to BlackRock and its Affiliates and their personnel, the remuneration and profitability relating to services to and sales of the Funds or other products may be greater than remuneration and profitability relating to services to and sales of certain funds or other products that might be provided or

offered. BlackRock and its Affiliates and their sales personnel may directly or indirectly receive a portion of the fees and commissions charged to the Funds or their shareholders. BlackRock and its advisory or other personnel may also benefit from increased amounts of assets under management. Fees and commissions may also be higher than for other products or services, and the remuneration and profitability to BlackRock or its Affiliates and such personnel resulting from transactions on behalf of or management of the Funds may be greater than the remuneration and profitability resulting from other funds or products.

BlackRock and its Affiliates and their personnel may receive greater compensation or greater profit in connection with an account for which BlackRock serves as an adviser than with an account advised by an unaffiliated investment adviser. Differentials in compensation may be related to the fact that BlackRock may pay a portion of its management fee to its Affiliate, or relate to compensation arrangements, including for portfolio management, brokerage transactions or account servicing. Any differential in compensation may create a financial incentive on the part of BlackRock or its Affiliates and their personnel to recommend BlackRock over unaffiliated investment advisers or to effect transactions differently in one account over another.

BlackRock and its Affiliates may provide valuation assistance to certain clients with respect to certain securities or other investments and the valuation recommendations made for their clients’ accounts may differ from the valuations for the same securities or investments assigned by a Fund’s pricing vendors, especially if such valuations are based on broker-dealer quotes or other data sources unavailable to the Fund’s pricing vendors. While BlackRock will generally communicate its valuation information or determinations to a Fund’s pricing vendors and/or fund accountants, there may be instances where the Fund’s pricing vendors or fund accountants assign a different valuation to a security or other investment than the valuation for such security or investment determined or recommended by BlackRock.

To the extent permitted by applicable law, a Fund may invest all or some of its short term cash investments in any money market fund or similarly-managed private fund advised or managed by BlackRock. In connection with any such investments, a Fund, to the extent permitted by the 1940 Act, may pay its share of expenses of a money market fund in which it invests, which may result in a Fund bearing some additional expenses.

BlackRock and its Affiliates and their directors, officers and employees, may buy and sell securities or other investments for their own accounts, and may have conflicts of interest with respect to investments made on behalf of a Fund. As a result of differing trading and investment strategies or constraints, positions may be taken by directors, officers, employees and Affiliates of BlackRock that are the same, different from or made at different times than positions taken for a Fund. To lessen the possibility that a Fund will be adversely affected by this personal trading, the Trust, the Distributor and BFA each have adopted a Code of Ethics in compliance with Section 17(j) of the 1940 Act that restricts securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information about obtaining documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. Each Code of Ethics is also available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by e-mail at publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, DC 20549-1520.

BlackRock and its Affiliates will not purchase securities or other property from, or sell securities or other property to, a Fund, except that the Fund may in accordance with rules adopted under the 1940 Act engage in transactions with accounts that are affiliated with the Fund as a result of common officers, directors, or investment advisers or pursuant to exemptive orders granted to the Funds and/or BlackRock by the SEC. These transactions would be affected in circumstances in which BlackRock determined that it would be appropriate for a Fund to purchase and another client of BlackRock to sell, or a Fund to sell and another client of BlackRock to purchase, the same security or instrument on the same day. From time to time, the activities of a Fund may be restricted because of regulatory requirements applicable to BlackRock or its Affiliates and/or BlackRock’s internal policies designed to comply with, limit the applicability of, or otherwise relate to such requirements. A client not advised by BlackRock would not be subject to some of those considerations. There may be periods when BlackRock may not initiate or recommend certain types of

transactions, or may otherwise restrict or limit their advice in certain securities or instruments issued by or related to companies for which an Affiliate is performing investment banking, market making, advisory or other services or has proprietary positions. For example, when an Affiliate is engaged in an underwriting or other distribution of securities of, or advisory services for, a company, the Funds may be prohibited from or limited in purchasing or selling securities of that company. In addition, when BlackRock is engaged to provide advisory or risk management services for a company, BlackRock may be prohibited from or limited in purchasing or selling securities of that company on behalf of a Fund, particularly where such services result in BlackRock obtaining material non-public information about the company. Similar situations could arise if personnel of BlackRock or its Affiliates serve as directors of companies the securities of which the Funds wish to purchase or sell. However, if permitted by applicable law, and where consistent with BlackRock’s policies and procedures (including the necessary implementation of appropriate information barriers), the Funds may purchase securities or instruments that are issued by such companies, are the subject of an underwriting, distribution, or advisory assignment by an Affiliate or a or are the subject of an advisory or risk management assignment by BlackRock, or where personnel of BlackRock or its Affiliates are directors or officers of the issuer.

In certain circumstances where the Funds invest in securities issued by companies that operate in certain regulated industries, in certain emerging or international markets, or are subject to corporate or regulatory ownership definitions, there may be limits on the aggregate amount invested by Affiliates (including BlackRock) for their proprietary accounts and for client accounts (including the Funds) that may not be exceeded without the grant of a license or other regulatory or corporate consent, or, if exceeded, may cause BlackRock, the Funds or other client accounts to suffer disadvantages or business restrictions. As a result, BlackRock on behalf of its clients (including the Funds) may limit purchases, sell existing investments, or otherwise restrict or limit the exercise of rights (including voting rights) when BlackRock, in its sole discretion, deems it appropriate in light of potential regulatory or other restrictions on ownership or other consequences resulting from reaching investment thresholds.

In those circumstances where ownership thresholds or limitations must be observed, BlackRock seeks to allocate limited investment opportunities equitably among clients (including the Funds), taking into consideration benchmark weight and investment strategy. When ownership in certain securities nears an applicable threshold, BlackRock may limit purchases in such securities to the issuer’s weighting in the applicable benchmark used by BlackRock to manage the Fund. If client (including Fund) holdings of an issuer exceed an applicable threshold and BlackRock is unable to obtain relief to enable the continued holding of such investments, it may be necessary to sell down these positions to meet the applicable limitations. In these cases, benchmark overweight positions will be sold prior to benchmark positions being reduced to meet applicable limitations.

In addition to the foregoing, other ownership thresholds may trigger reporting requirements to governmental and regulatory authorities, and such reports may entail the disclosure of the identity of a client or BlackRock’s intended strategy with respect to such security or asset.

BlackRock and its Affiliates may maintain securities indexes as part of their product offerings. Index based funds seek to track the performance of securities indexes and may use the name of the index in the fund name. Index providers, including BlackRock and its Affiliates may be paid licensing fees for use of their index or index name. BlackRock and its Affiliates will not be obligated to license their indexes to BlackRock, and BlackRock cannot be assured that the terms of any index licensing agreement with BlackRock and its Affiliates will be as favorable as those terms offered to other index licensees.

BlackRock and its Affiliates may serve as authorized participants in the creation and redemption of ETFs, including funds advised by affiliates of BlackRock. BlackRock and its Affiliates may therefore be deemed to be participants in a distribution of such ETFs, which could render them statutory underwriters.

Funds’ custodian may have the effect of reducing custody fees when the Funds leave cash balances uninvested. When a Fund’s actual operating expense ratio exceeds a stated cap, a reduction in custody fees reduces the amount of waivers and/or reimbursements BFA would be required to make to the Fund. This could be viewed as having the potential to provide BFA an incentive to keep high positive cash balances for Funds with expense caps in order to offset fund custody fees that BFA might otherwise reimburse. However, portfolio managers of BFA do not intentionally keep uninvested balances high, but rather make investment decisions that they anticipate will be beneficial to fund performance.

Present and future activities of BlackRock and its Affiliates, including BlackRock Advisors, LLC, in addition to those described in this Section, may give rise to additional conflicts of interest.

Control Persons and Principal Holders of Securities

As of April 16, 2013, the shareholders below were known by the Trust to own 5% or more of the outstanding shares of the specified Fund’s outstanding Capital, Institutional, Premium, Select, Trust and Aon Captives Shares, as the case may be, in the listed capacity.


Name of Fund	Name and Address of Shareholder	Percentage of Share Class		Nature of Ownership

BlackRock Cash Funds: Prime

Capital Shares	Barclays Nominees (Manx) Limited Barclays House Victoria Street Douglas Isle of Man, British Isles		5%	Record

	JP Morgan Clearing Corp One Metrotech Center North Brooklyn, NY 11201		10%	Record

	JP Morgan Clearing Corp One Metrotech Center North Brooklyn, NY 11201		10%	Record

	JP Morgan Clearing Corp One Metrotech Center North Brooklyn, NY 11201		12%	Record

	Computer Sciences Corporation 3170 Fairview Park Drive Falls Church, VA 22042		15%	Record

	Banc of America Securities LLC 200N College St 3rd Floor Charlotte, NC 28255		39%	Record

Institutional Shares	Harris Nesbitt Corp Brkr & Svc Agt 111 W Monroe St LL/East Chicago, IL 60603		5%	Record

	Anadarko Petroleum Corporation 1201 Lake Robbins Drive Spring, TX 77380		6%	Record

	Hare & Co c/o Bank of New York 111 Sanders Creek Parkway East Syracuse, NY 13057		10%	Record

	Banc of America Securities LLC 200N College St 3rd Floor NC1-004-03-06 Charlotte, NC 28255		10%	Record

	BNY OCS Nominees Ltd 111 Sanders Creek Pkwy East Syracuse, NY 13057		21%	Record

	AI Petroleum Holdings LLC 2711 Centerville Road Wilmington, DE 19808		24%	Record

Premium Shares	Brown Brothers Harriman & Co Distribution Center 525 Washington Blvd Jersey City, NJ 07310		8%	Record


Name of Fund	Name and Address of Shareholder	Percentage of Share Class		Nature of Ownership

	SLM Corporation 2001 Edmund Halley Drive Reston, VA 20190		14%	Record

	Chicago Mercantile Exchange Inc Customer Segregated 20 South Wacker Drive Chicago, IL 60606		28%	Record

	Hare & Co c/o Bank of New York 111 Sanders Creek Parkway East Syracuse, NY 13057		30%	Record

Select Shares	Laba and Co 135 S Lasalle, Suite 1811 Chicago, IL 60603		29%	Record

	Barclays Capital Inc 200 Park Avenue New York, NY 10166		68%	Record

Trust Shares	Barclays Capital Inc 200 Park Avenue New York, NY 10166		100%	Record

BlackRock Cash Funds: Institutional

Institutional Shares	3M Company 3M Center-Bldg 224-55-26 Saint Paul, MN 55144		5%	Record

	Harris Nesbitt Corp Brkr & Svc Agt & Har 111 W Monroe St LL/East Chicago, IL 60603		5%	Record

	AT&T Inc 208 S Akard Street Room 2750.10 Dallas, TX 75202		6%	Record

	AI Petroleum Holdings LLC 2711 Centerville Road Wilmington, DE 19808		69%	Record

Select Shares	JP Morgan Clearing Corp One Metrotech Center North Brooklyn, NY 11201		24%	Record

	Barclays Capital Inc 200 Park Avenue New York, NY 10166		75%	Record

Trust Shares	Barclays Capital Inc 200 Park Avenue New York, NY 10166		100%	Record

Aon Captives Shares	Barclays Nominees (Manx) Limited PO Box 9 Barclays House Victoria Street Douglas		7%	Record

	Barclays Nominees (Manx) Limited PO Box 9 Barclays House Victoria Street Douglas		8%	Record

	Geisinger Insurance Corporation 76 St Paul Street, Suite 500 Burlington, VT 05401		9%	Record

	Barclays Nominees (Manx) Limited PO Box 9 Barclays House Victoria Street Douglas		9%	Record

	Physicians Prof Liab Rrg Inc 76 St Paul Street, Suite 500 Burlington, VT 05401		9%	Record


Name of Fund	Name and Address of Shareholder	Percentage of Share Class		Nature of Ownership

	Iron Mountain Assurance Corporation 76 St Paul Street, Suite 500 Burlington, VT 05401		11%	Record

	Barclays Nominee (Manx) Limited PO Box 9 Barclays House Victoria Street Douglas Isle of Man IM99 1AJ		45%	Record

BlackRock Cash Funds: Government

Select Shares	Barclays Capital Inc 200 Park Avenue New York, NY 10166		100%	Record

Trust Shares	Barclays Capital Inc 200 Park Avenue New York, NY 10166		100%	Record

BlackRock Cash Funds: Treasury

Capital Shares	Sungard Data Systems Inc. 680 East Swedesford Road Wayne, PA 19087		23%	Record

	Banc of America Securities LLC 200 N College St 3rd Floor Charlotte NC 28255		76%	Record

Institutional Shares	Centurytel Service Group LLC 100 Centurytel Drive Monroe, LA 71202		100%	Record

Select Shares	Barclays Capital Inc. 200 Park Avenue New York, NY 10166		100%	Record

Trust Shares	Barclays Capital Inc. 200 Park Avenue New York, NY 10166		100%	Record

For purposes of the 1940 Act, any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to “control” such company. Accordingly, to the extent that a shareholder identified in the foregoing table is identified as the beneficial holder of more than 25% of a Fund, or is identified as the holder of record of more than 25% of a Fund and has voting and/or investment powers, such shareholder may be presumed to control such Fund.

Investment Adviser and Other Service Providers

Investment Adviser. The Funds are feeder funds in a master/feeder structure. As a result each Fund invests all of its assets in a related Master Portfolio of MIP. The Master Portfolios have retained BFA as the investment adviser to manage their assets.

Advisory Fees. BFA is entitled to receive monthly fees at the annual rate of 0.10% of each Master Portfolio’s average daily net assets. From time to time, BFA may waive such fees in whole or in part. Any such waiver will reduce the expenses of each Master Portfolio and, accordingly, have a favorable impact on its performance. BFA has contractually agreed to waive a portion of its management fees and accept payment at an annual rate of 0.07% through April 30, 2014 with respect to each Master Portfolio. Pursuant to the investment advisory contract between BFA and MIP on behalf of the Master Portfolios (“Advisory Contract”), BFA furnishes MIP’s Board of Trustees with periodic reports on the investment strategy and performance of the Master Portfolios.

BFA is an indirect wholly-owned subsidiary of BlackRock, Inc.

cast in person at a meeting called for the purpose of voting on such approval. The Advisory Contract is terminable without penalty, on 60 days’ written notice, by either party. The Advisory Contract will terminate automatically, as to the relevant Master Portfolio, in the event of its assignment (as defined in the 1940 Act).

For the fiscal years shown below, the related Master Portfolio of each Fund paid to BFA, the following management fees, net of waivers and/or offsetting credits:


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	7,846,621	$	7,420,005	$	8,284,265

Money Market Master Portfolio	$	12,963,015	$	19,011,676	$	25,231,520

Government Money Market Master Portfolio	$	22,357	$	53,794	$	(12,489	)

Treasury Money Market Master Portfolio	$	2,476,460	$	959,491	$	1,261,911

For the fiscal years shown below, BFA waived the following management fees with respect to the Master Portfolios in which the Funds invest:


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	3,439,471	$	3,262,621	$	3,623,498

Money Market Master Portfolio	$	5,668,679	$	8,338,684	$	11,036,001

Government Money Market Master Portfolio	$	136,729	$	35,880	$	2,872

Treasury Money Market Master Portfolio	$	1,927,451	$	581,541	$	575,143

The fees and expenses of the Independent Trustees of MIP, counsel to the Independent Trustees of MIP, and the independent registered public accounting firm that provides audit services in connection with the Master Portfolios (collectively referred to as the “MIP Independent Expenses”) are paid directly by the Master Portfolios. Each of BAL and BFA, as applicable, has contractually undertaken to reimburse or provide an offsetting credit to each Master Portfolio for such MIP Independent Expenses through April 30, 2014.

For the fiscal years shown below, BFA provided an offsetting credit for MIP Independent Expenses, in the amounts shown, against management fees paid by the Master Portfolios in which the Funds invest:


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	178,811	$	192,777	$	170,403

Money Market Master Portfolio	$	263,903	$	445,252	$	518,726

Government Money Market Master Portfolio	$	21,997	$	22,902	$	18,866

Treasury Money Market Master Portfolio	$	82,521	$	49,146	$	50,177

Administrator. Effective July 1, 2012, the Trust has engaged BAL to provide certain administration services to the Funds. Pursuant to an Administration Agreement with the Trust, BAL and its affiliates provide as administration services, among other things: supervision of the administrative operation of the Trust and the Funds, provision of management reporting and treasury administration services, financial reporting, legal and tax services, and preparation of proxy statements and shareholder reports for the Funds. BAL and its affiliates also furnish office space and certain facilities required for conducting the business of the Trust together with all other administrative services that are not being furnished by BFA. BAL and its affiliates also pay the compensation of the Trust’s Trustees who are not Independent Trustees and of officers and employees who are affiliated with the Trust. For providing such services, BAL is entitled to a monthly fee at an annual rate of 0.05% of each Fund’s average daily net assets attributable to each of Aon Captives Shares and Institutional Shares, 0.07% of each Fund’s average daily net assets attributable to Capital Shares, 0.10% of each Fund’s average daily net assets attributable to Premium Shares, 0.15% of each Fund’s average daily net assets attributable to Select Shares (0.13% pursuant to BAL’s contractual agreement to waive a portion of its administration fees attributable to Select Shares through April 30, 2014) and 0.38% of each Fund’s average

daily net assets attributable to Trust Shares. BAL has contracted with State Street Bank and Trust Company (“State Street”) to provide certain sub-administration services to the Funds. BAL, not the Funds, is responsible for providing compensation to State Street for such services.

BAL also may engage and supervise Shareholder Servicing Agents, as defined in “Shareholder Servicing Agents” below, on behalf of the Funds.

In addition, BAL has agreed to bear all costs of the Funds’ and the Trust’s operations, including, in the case of each Fund’s Institutional Shares and BlackRock Cash Funds: Institutional — Aon Captives Shares, shareholder servicing fees of up to 0.05%, in the case of each Fund’s Capital Shares, shareholder servicing fees of up to 0.07%, in the case of each Fund’s Premium Shares, shareholder servicing fees of up to 0.10%, in the case of each Fund’s Select Shares, shareholder servicing fees of up to 0.15%, and, in the case of each Fund’s Trust Shares, shareholder servicing fees of up to 0.25% and processing fees of up to 0.13%, but not including brokerage expenses, advisory fees, distribution plan expenses, certain fees and expenses related to the Trust’s Independent Trustees and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses.

BAL is not entitled to compensation for providing administration services to a Master Portfolio for so long as BAL is entitled to compensation for providing administration services to the Fund that invests substantially all of its assets in the Master Portfolio, or BAL or an affiliate receives management fees from the Master Portfolio. Each Fund having multiple classes allocates all expenses of the Master Portfolio, including the Master Portfolio’s management fee, to each share class in proportion to the aggregate net asset value of such class as compared to all classes of the Fund in accordance with the Fund’s multi-class plan under Rule 18f-3 under the 1940 Act.

Prior to July 1, 2012, BTC served as each Fund’s administrator and served subject to terms and conditions that are substantially similar to those set forth in the Prospectuses and this SAI with respect to BAL.

For the fiscal years shown below, the Funds paid the following administration fees to BAL or BTC, net of waivers and/or offsetting credits:


	Fiscal Year Ended December 31,
Fund	2010		2011		2012

BlackRock Cash Funds: Prime	$	4,657,228	$	4,793,298	$	5,234,976

BlackRock Cash Funds: Institutional	$	3,957,385	$	5,798,803	$	7,644,381

BlackRock Cash Funds: Government	$	56,044	$	8,823	$	(5,165	)

BlackRock Cash Funds: Treasury	$	927,607	$	111,897	$	236,353

For the fiscal years shown below, BAL or BTC waived the following administration fees with respect to the Funds:


	Fiscal Year Ended December 31,
Fund	2010		2011		2012

BlackRock Cash Funds: Prime	$	92,765	$	66,973	$	38,887

BlackRock Cash Funds: Institutional	$	25,031	$	21,513	$	12,131

BlackRock Cash Funds: Government	$	39,200	$	20,051	$	8,464

BlackRock Cash Funds: Treasury	$	140,899	$	142,750	$	82,514

The fees and expenses of the Independent Trustees of the Trust, counsel to the Independent Trustees of the Trust, and the independent registered public accounting firm that provides audit services in connection with the Funds (collectively referred to as the “Independent Expenses”) are paid directly by the Funds. Each of BAL and BFA, as applicable, has contractually undertaken to reimburse or provide an offsetting credit to the Funds for such Independent Expenses through April 30, 2014.

For the fiscal years shown below, BAL or BTC provided an offsetting credit, in the amounts shown, against administration fees paid with respect to the Funds:


	Fiscal Year Ended December 31,
Fund	2010		2011	2012

BlackRock Cash Funds: Prime	$	31,970	$15,816	$13,967

BlackRock Cash Funds: Institutional	$	45,423	$15,816	$13,967

BlackRock Cash Funds: Government	$	12,067	$15,816	$13,957

BlackRock Cash Funds: Treasury	$	15,814	$15,816	$13,967

Distributor. BlackRock Investments, LLC (previously defined as the “Distributor”) is the distributor for the Funds’ shares. The Distributor is a registered broker-dealer located at 40 East 52nd Street, New York, New York 10022.

Each Fund has entered into a distribution agreement with the Distributor in connection with the continuous offering of shares of the Fund (the “Distribution Agreement”). The Distribution Agreement obligates the Distributor to pay certain expenses in connection with the offering of shares of the Funds. After the prospectuses, statements of additional information and periodic reports have been prepared, set in type and mailed to shareholders, the Distributor pays for the printing and distribution of these documents used in connection with the offering to dealers and investors. The Distributor also pays for other supplementary sales literature and advertising costs.

BlackRock Cash Funds: Institutional — Aon Captives Shares Distribution Plan. With respect solely to BlackRock Cash Funds: Institutional, the Trust has adopted a distribution plan (a “Plan”) for its Aon Captives Shares that authorizes, under Section 12(b) of the 1940 Act and Rule 12b-1 thereunder, payment for distribution-related expenses and compensation for distribution-related services, including on-going compensation to selling agents, in connection with Aon Captives Shares.

The Plan was adopted by the Trust’s Board of Trustees, including a majority of the Independent Trustees who had no direct or indirect financial interest in the Plan. The Plan was adopted because of its anticipated benefits to the Fund. The anticipated benefits include: easier and more effective management as a result of steady inflows of cash from the sale of new shares, lower transaction costs or better prices as a result of the ability to purchase larger blocks of securities, and avoidance of the forced sale of securities to meet redemptions that might adversely affect the performance of the Fund. Under the Plan and pursuant to the related Distribution Agreement with the Distributor, BlackRock Cash Funds: Institutional may pay the Distributor, as compensation for distribution-related services or as reimbursement for distribution-related expenses, monthly fees at the annual rate of up to 0.10% of the average daily NAV of BlackRock Cash Funds: Institutional’s Aon Captives Shares. Aon Benfield Securities, Inc. (“Aon”) has executed a dealer agreement with the Distributor that enables Aon to serve as a participating dealer for Aon Captives Shares. Aon Captives Shares are sold primarily to captive insurance companies administered by Aon Insurance Managers, the captive management and risk finance consulting arm of Aon.

The actual fee payable to the Distributor is determined, within such limits, from time to time by mutual agreement between the Trust and the Distributor and will not exceed the maximum sales charges payable by mutual funds sold by members of the Financial Industry Regulatory Authority, Inc. (“FINRA” and f/k/a the National Association of Securities Dealers, Inc. (“NASD”)) under the NASD Conduct Rules. The Distributor may enter into selling agreements with one or more selling agents (which may include BTC and its affiliates) under which such agents may receive compensation for distribution-related services from the Distributor, including, but not limited to, commissions or other payments to such agents based on the average daily net assets of BlackRock Cash Funds: Institutional shares attributable to their customers. The Distributor may retain any portion of the total distribution fee payable thereunder to compensate it for distribution-related services provided by it or to reimburse it for other distribution-related expenses.

The Plan will continue in effect from year to year if such continuance is approved by a majority vote of the Board of Trustees, including a majority of the Independent Trustees. The Distribution Agreement related to the

Plan also must be approved by such vote of the Board of Trustees, including a majority of the Independent Trustees. The Distribution Agreement will terminate automatically if assigned and may be terminated at any time, without payment of any penalty, by a vote of a majority of the outstanding voting securities of Aon Captives Shares of the Fund or by the vote of a majority of the Independent Trustees on not more than 60 days’ written notice. The Plan may not be amended to increase materially the amounts payable thereunder without the approval of a majority of the outstanding voting securities of the Fund, and no material amendment to the Plan may be made except by a majority of both the Board of Trustees and the Independent Trustees. The Plan requires that the Trust shall provide to the Trustees, and the Trustees shall review, at least quarterly, a written report of the amounts expended (and purposes therefor) under the Plan. Rule 12b-1 also requires that the selection and nomination of Independent Trustees be made by such Independent Trustees.

BlackRock Cash Funds: Institutional currently does not have a distribution plan in place for its Premium, Capital, Institutional, Select or Trust Shares. Shareholders of Premium, Capital, Institutional, Select or Trust Shares of each Fund do not pay any fees for distribution services.

For the fiscal year ended December 31, 2011, Aon Captives Shares of BlackRock Cash Funds: Institutional paid distribution fees in the amount of $15,801 under the Plan. Payments are made by the Fund pursuant to the Plan regardless of expenses incurred by the Distributor. In addition to payments received from the Fund, selling or servicing agents may receive significant additional payments directly from BAL, BFA, the Distributor or their affiliates in connection with the sale of Fund shares.

Shareholder Servicing Agents. Premium, Capital, Institutional, Select, Aon Captives and Trust Shares of the Funds have adopted a Shareholder Servicing Plan pursuant to which they have entered into Shareholder Servicing Agreements with BAL and certain financial institutions, securities dealers and other industry professionals (including BlackRock, the Distributor, PNC and their affiliates) (collectively, “Shareholder Servicing Agents”), and BAL may also enter into Shareholder Servicing Agreements with such Shareholder Servicing Agents for the provision of certain services to fund shareholders.

Trust Shares of the Funds have also adopted a Shareholder Servicing and Processing Plan pursuant to which they or BAL have entered into Shareholder Servicing and Processing Agreements with certain Shareholder Servicing Agents for providing services to the Trust Class shareholders.

The Shareholder Servicing Plan services provided by BAL or Shareholder Servicing Agents may include serving as an agent of the Funds for purposes of accepting orders for purchases and redemptions of Fund shares, providing administrative support and account service such as processing purchases and redemptions of shares on behalf of individual and omnibus Fund accounts, answering shareholder inquiries, keeping records, transmitting reports and communications from the Funds, and providing reports on the status of individual and omnibus accounts. Shareholder Servicing Agents may provide these services, in whole or in part, by operating electronic transaction systems or websites through which shareholders may obtain information or engage in purchase or redemption transactions of Fund shares. By operating these systems or providing other services described above, the Shareholder Servicing Agents make the Funds available to their clients.

A Shareholder Servicing Agent may make decisions about which investment options it will service and make available to its clients based on the payments the Shareholder Servicing Agent may be eligible to receive for its services. Therefore, payments to a Shareholder Servicing Agent may create potential conflicts of interest between the Shareholder Servicing Agent and its clients where the Shareholder Servicing Agent determines which investment options it will make available to those clients.

Pursuant to its Administration Agreement with the Trust, as described in the section entitled “Administrator,” BAL pays shareholder servicing fees to certain Shareholder Servicing Agents in amounts not exceeding maximum fee rates approved by the Trust’s Board of Trustees, for those shareholder servicing, sub-administration, recordkeeping, sub-transfer agency and processing services that the Shareholder Servicing Agents perform for their clients that would otherwise be performed by BAL or the Funds’ other service providers. For providing some or all of these services, each Shareholder Servicing Agent is entitled to receive a monthly fee at the annual rate of up to 0.05% of the average daily net assets of each Fund represented by

Institutional Shares owned and of BlackRock Cash Funds: Institutional represented by Aon Captives Shares owned, up to 0.07% of the average daily net assets of each Fund represented by Capital Shares owned, up to 0.10% of the average daily net assets of each Fund represented by Premium Shares owned, up to 0.15% of the average daily net assets of each Fund represented by Select Shares owned, and up to 0.25% of the average daily net assets of each Fund represented by Trust Shares owned during the period for which payment is being made by investors with whom the Shareholder Servicing Agent maintains a servicing relationship, or an amount that equals the maximum amount payable to the Shareholder Servicing Agent under applicable laws, regulations or rules, including the NASD Conduct Rules, whichever is less.

Pursuant to the Shareholder Servicing and Processing Plan for Trust Shares, Shareholder Servicing Agents provide personal services relating to the aggregation and processing of purchase and redemption orders, processing of dividend payments, certain sub-accounting services, transmission and receipt of funds in connection with purchase and redemption orders, verification of certain personal information in connection with the purchase or redemption of Fund shares, and generating and distributing periodic statements and other information as required. For these services, each Shareholder Servicing Agent is entitled to receive a monthly processing fee at the annual rate of up to 0.13% of the average daily net assets of each Fund represented by Trust Shares owned during the period for which payment is being made by investors with whom the Shareholder Servicing Agent maintains a servicing arrangement.

A Shareholder Servicing Agent also may impose certain conditions on its customers, subject to the terms of the Funds’ Prospectuses and this SAI, that are in addition to or different from those imposed by the Trust, such as requiring a minimum initial investment or payment of a separate fee for additional services.

Shareholder Servicing Agents may charge their clients additional fees for account-related services. Shareholder Servicing Agents may charge their customers a service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is determined and disclosed to its customers by each individual Shareholder Servicing Agent. Service fees typically are fixed, nominal dollar amounts and are in addition to the sales and other charges described in the Prospectuses and this SAI. Your Shareholder Servicing Agent will provide you with specific information about any service fees you will be charged.

Non-Plan Payments. BlackRock may make payments relating to distribution and sales support activities out of their past profits or other sources available to them (and not as an additional charge to a Fund). From time to time, BlackRock or its affiliates may compensate affiliated and unaffiliated entities (including BlackRock, PNC and their affiliates, and entities that may also be serving as distribution agents or Shareholder Servicing Agents of the Fund) (collectively, “Service Organizations”) for the sale and distribution of shares of a Fund or for services to a Fund and its shareholders. These payments that are not associated with a Shareholder Servicing Plan or distribution plan are therefore referred to as “non-Plan payments.” The non-Plan payments would be in addition to a Fund’s payments described in this SAI for distribution (if the Fund has adopted a distribution plan pursuant to Rule 12b-1) and shareholder servicing. These non-Plan payments may take the form of, among other things, “due diligence” payments for a dealer’s examination of the Funds and payments for providing extra employee training and information relating to Funds; “listing” fees for the placement of the Funds on a dealer’s list of mutual funds available for purchase by its customers; “finders” fees for directing investors to the Fund; “distribution and marketing support” fees or “revenue sharing” for providing assistance in promoting the sale of the Funds’ shares; payments for the sale of shares and/or the maintenance of share balances; CUSIP fees; maintenance fees; and set-up fees regarding the establishment of new accounts. The payments made by BlackRock and its affiliates may be a fixed dollar amount or may be based on a percentage of the value of shares sold to, or held by, customers of the Service Organization involved, and may be different for different Service Organizations. The payments described above are made from BlackRock’s or its affiliates’ own assets pursuant to agreements with Service Organizations and do not change the price paid by investors for the purchase of the Fund’s shares or the amount the Fund will receive as proceeds from such sales.

The payments described above may be made, at the discretion of BlackRock or its affiliates, to Service Organizations in connection with the sale and distribution of Fund shares. Pursuant to applicable FINRA

regulations, the details of certain of these payments, including the Service Organizations receiving such payments in connection with the sale and distribution of Fund shares, are required to be disclosed. The level of payments made to these Service Organizations in any year will vary, may be limited to specific Funds or share classes and normally will not exceed the sum of (a) 0.25% of such year’s Fund sales by that Service Organization, and (b) 0.21% of the assets attributable to that Service Organization invested in a Fund. In certain cases, the payments described in the proceeding sentence are subject to certain minimum payment levels. As of the date of this SAI, as amended or supplemented from time to time, the following Service Organizations are receiving such payments in association with the sale and distribution of products other than the Funds, that are advised or offered by BlackRock or its affiliates: Ameriprise Financial Services, AXA Advisors, Cetera Advisor Networks LLC, Cetera Advisors LLC, Cetera Financial Specialists LLC, Cetera Investment Services LLC, Chase Investment Services Corp, CCO Investment Services, Commonwealth Equity Services (Commonwealth Financial Network), Donegal Securities, FSC Securities Corporation, ING Financial Partners, Investacorp, Inc., LPL Financial Corporation, Merrill Lynch, MetLife Securities, Morgan Stanley Smith Barney, New England Securities Corporation, Oppenheimer & Co., PFS Investments, Raymond James, RBC Capital Markets, Robert W. Baird & Co., Royal Alliance Associates, SagePoint Financial, Securities America, State Farm VP Management Corp., Tower Square Securities, Triad Advisors, Inc., UBS Financial Services, U.S. Bancorp Investments, Walnut Street Securities, Wells Fargo, Woodbury Financial Services, Inc. and/or broker dealers and other financial services firms under common control with the above organizations (or their successors or assignees).

Other Distribution Arrangements. If investment advisers, distributors or affiliates of mutual funds pay bonuses and incentives in differing amounts, financial firms and their financial consultants may have financial incentives for recommending a particular mutual fund over other mutual funds. In addition, depending on the arrangements in place at any particular time, a financial firm and its financial consultants may also have a financial incentive for recommending a particular share class over other share classes. You should consult your financial adviser and review carefully any disclosure by the financial firm as to compensation received by your financial adviser for more information about the payments described above.

Furthermore, BlackRock and its affiliates may contribute to various non-cash and cash incentive arrangements to promote the sale of shares, and may sponsor various contests and promotions subject to applicable FINRA regulations in which participants may receive prizes such as travel awards, merchandise and cash. Subject to applicable FINRA regulations, BlackRock and its affiliates may also: (i) pay for the travel expenses, meals, lodging and entertainment of broker/dealers, financial institutions and their salespersons in connection with educational and sales promotional programs, (ii) sponsor speakers, educational seminars and charitable events and (iii) provide other sales and marketing conferences and other resources to broker-dealers, financial institutions and their salespersons.

Custodian. State Street has been retained to act as custodian for the Funds and the Master Portfolios and is located at 100 Summer Street, Boston, Massachusetts 02110. The custodian, among other things, maintains a custody account or accounts in the name of the Funds and the Master Portfolios; receives and delivers all assets for each Fund and each Master Portfolio upon purchase and upon sale or maturity, and collects and receives all income and other payments and distributions on account of the assets of the Funds and the Master Portfolios. On a monthly basis, the custodian nets each Master Portfolio’s daily positive and negative cash balances and calculates a credit (“custody credit”) or a charge based on that net amount. The custodian fees, including the amount of any overdraft charges, may be reduced by the amount of such custody credits, and any unused credits at the end of a given month may be carried forward to a subsequent month. Any such credits unused by the end of a Master Portfolio’s fiscal year will not expire. Net debits at the end of a given month are added to the applicable Fund’s custody bill and paid by such Fund.

these fees and expenses pursuant to its Administration Agreement with the Trust. In addition, the Transfer Agency Agreement contemplates that State Street will be reimbursed for other expenses incurred by it at the request or with the written consent of the Funds, including, without limitation, any equipment or supplies that the Trust specifically orders or requires State Street to order.

Independent Registered Public Accounting Firm. The Audit Committee of the Trust, which is comprised solely of non-interested Trustees, has selected an independent registered public accounting firm for the Funds that audits the Funds’ financial statements. Please see the inside back cover page of your Fund’s Prospectus for information on your Fund’s independent registered public accounting firm.

Determination of Net Asset Value

The Master Portfolios use the amortized cost method to determine the value of their respective securities pursuant to Rule 2a-7 under the 1940 Act. The amortized cost method involves valuing a security at its cost and amortizing any discount or premium over the period until maturity, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which the value, as determined by amortized cost, is higher or lower than the price that the Funds would receive if the security were sold. During these periods the yield to a shareholder may differ somewhat from that which could be obtained from a similar fund that uses a method of valuation based upon market prices. Thus, during periods of declining interest rates, if the use of the amortized cost method results in a lower value of each Fund’s portfolio on a particular day, a prospective investor in the Funds would be able to obtain a somewhat higher yield than would result from making an investment in the Funds using solely market values, and existing Fund shareholders would receive correspondingly less income. The converse would apply during periods of rising interest rates.

Rule 2a-7 provides that in order to value their portfolios using the amortized cost method, the Funds must maintain a dollar-weighted average portfolio maturity of 60 days or less and a dollar-weighted average life of 120 days or less, purchase securities having remaining maturities (as defined in Rule 2a-7) of 397 calendar days (about 13 months) or less, and invest only in those high-quality securities that are determined by the Board of Trustees to present minimal credit risks. The maturity of an instrument is generally deemed to be the period remaining until the date when the principal amount thereof is due or the date on which the instrument is to be redeemed. However, Rule 2a-7 provides that the maturity of an instrument may be deemed shorter in the case of certain instruments, including certain variable-rate and floating-rate instruments subject to demand features. Pursuant to Rule 2a-7, the Board is required to establish procedures designed to stabilize, to the extent reasonably possible, each Fund’s price per share as computed for the purpose of sales and redemptions at $1.00. Such procedures include review of each Fund’s portfolio holdings by the Board of Trustees, at such intervals as it may deem appropriate, to determine whether a Fund’s net asset value per share as determined by using available market quotations (or an appropriate substitute which reflects current market conditions) deviates from $1.00 per share based on amortized cost. The extent of any deviation will be examined by the Board of Trustees. If such deviation exceeds 1/2 of 1%, the Board will promptly consider what action, if any, will be initiated. In the event the Board determines that a deviation exists that may result in material dilution or other unfair results to shareholders, the Board will take such corrective action as it regards as necessary and appropriate, such action may include redeeming shares in-kind, selling portfolio securities prior to maturity, reducing or withholding dividends, shortening the average portfolio maturity, reducing the number of outstanding shares without monetary consideration, and utilizing a net asset value per share as determined by using available market quotations.

Purchase, Redemption and Pricing of Shares

closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the New York Stock Exchange (“NYSE”) closes early ⁽¹⁾ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day. Each Fund reserves the right to change the amount of the minimum investment and subsequent purchases in the Fund. An investor’s investment in the Funds and/or other investment vehicles managed or maintained by BFA or its affiliates may be aggregated when determining whether an investor meets a minimum investment amount. The minimum initial investment amounts for the classes of the Funds may be reduced or waived by BFA. On any day a Fund closes early, purchase and redemption orders received after the Funds’ closing time will be executed on the next business day. In addition, the Funds reserve the right to advance the time by which purchase and redemption orders must be received to be executed on the same business day as permitted by the SEC and applicable law.

In-Kind Purchases. Payment for shares of the Funds may, at the discretion of BFA, be made in the form of securities that are permissible investments for the Funds and must meet the investment objectives, policies and limitations of the Funds as described in their Prospectuses. In connection with an in-kind securities payment, the Funds may require, among other things, that the securities (i) be valued on the day of purchase in accordance with the pricing methods used by the Funds or the Master Portfolios; (ii) are accompanied by satisfactory assurance that the Funds will have good and marketable title to such securities received by them; (iii) are not subject to any restrictions upon resale by the Funds; (iv) be in proper form for transfer to the Funds; and (v) are accompanied by adequate information concerning the basis and other tax matters relating to the securities. All dividends, interest, subscription or other rights pertaining to such securities shall become the property of the Funds engaged in the in-kind purchase transaction and must be delivered to such Fund or Funds by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for investment and not for immediate resale. A Fund immediately will transfer to its Master Portfolio any and all securities received by it in connection with an in-kind purchase transaction, in exchange for interests in such Master Portfolio. Shares purchased in exchange for securities generally cannot be redeemed until the transfer has settled.

Suspension of Redemption Rights or Payment of Redemption Proceeds. The Funds generally remit the proceeds from a sale the same Business Day after receiving a properly executed order to sell. Each Fund can delay payment for one Business Day. A Fund may postpone and/or suspend redemption and payment beyond one Business Day only as follows: (1) for any period during which there is a non-routine closure of the Federal Reserve wire system or applicable Federal Reserve Banks; (2) for any period (a) during which the NYSE is closed other than customary weekend and holiday closings or (b) during which trading on the NYSE is restricted; (3) for any period during which an emergency exists as a result of which (a) disposal of securities owned by a Fund is not reasonably practicable or (b) it is not reasonably practicable for a Fund to fairly determine the net asset value of shares of the Fund; (4) for any period during which the SEC has, by rule or regulation, deemed that (a) trading shall be restricted or (b) an emergency exists; (5) for any period that the SEC may by order permit for your protection; or (6) for any period during which a Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal securities laws as discussed below.

⁽¹⁾

SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 31, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

and payment of redemption proceeds in order to facilitate the permanent liquidation of the Fund in an orderly manner. If this were to occur, it would likely result in a delay in your receipt of your redemption proceeds.

Declaration of Trust Provisions Regarding Redemptions at Option of Trust. As provided in the Trust’s Declaration of Trust, the Trustees may require shareholders to redeem shares for any reason under terms set by the Trustees, including, but not limited to, the failure of a shareholder to supply a taxpayer identification number if required to do so, or to have the minimum investment required, or to pay when due for the purchase of shares issued to such shareholder.

Portfolio Transactions

Since the Funds invest all of their assets in portfolios of MIP, set forth below is a description of the Master Portfolios’ policies governing portfolio securities transactions.

General. Subject to policies established by the Board of Trustees, BFA is primarily responsible for the execution of a Master Portfolio’s portfolio transactions and the allocation of brokerage. BFA does not execute transactions through any particular broker or dealer, but seeks to obtain the best net results for the Master Portfolio, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities. While BFA generally seeks reasonable trade execution costs, a Master Portfolio does not necessarily pay the lowest spread or commission available, and payment of the lowest commission or spread is not necessarily consistent with obtaining the best price and execution in particular transactions. The following disclosure provides some more detail regarding the Master Portfolio’s practices regarding Portfolio Transactions. Depending on its investment objective, a Master Portfolio may not engage in some of the transactions described below.

BFA does not consider the provision or value of research, products or services a broker or dealer may provide, if any, as a factor in the selection of a broker or dealer or the determination of the reasonableness of commissions paid in connection with portfolio transactions. BFA does not consider sales of shares of the mutual funds it advises as a factor in the selection of brokers or dealers to execute portfolio transactions for a Master Portfolio; however, whether or not a particular broker or dealer sells shares of the mutual funds advised by BFA neither qualifies nor disqualifies such broker or dealer to execute transactions for those mutual funds.

A Master Portfolio’s purchase and sale orders for securities may be combined with those of other accounts that BFA manages or advises, and for which it has brokerage placement authority. If purchases or sales of portfolio securities of a Master Portfolio and one or more other accounts managed or advised by BFA are considered at or about the same time, transactions in such securities are allocated among the Master Portfolio and the other accounts in a manner deemed equitable to all by BFA. In some cases, this procedure could have a detrimental effect on the price or volume of the security as far as a Master Portfolio is concerned. However, in other cases, it is possible that the ability to participate in volume transactions and to negotiate lower brokerage commissions will be beneficial to a Master Portfolio.

Payments of commissions to brokers who are affiliated persons of the Master Portfolio with respect to the Fund (or affiliated persons of such persons), will be made in accordance with Rule 17e-1 under the 1940 Act.

Each Master Portfolio anticipates that its brokerage transactions involving foreign securities generally will be conducted primarily on the principal stock exchanges of the applicable country. Foreign equity securities may be held by a Master Portfolio in the form of depositary receipts, or other securities convertible into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in over-the-counter markets in the United States or Europe, as the case may be. American Depositary Receipts, like other securities traded in the United States, will be subject to negotiated commission rates. Because the shares of each Fund and interests of the Master Portfolios are redeemable on a daily basis in U.S. dollars, each Master Portfolio intends to manage its portfolio so as to give reasonable assurance that it will be able to obtain U.S. dollars to the extent necessary to meet anticipated redemptions. Under present conditions, it is not believed that these considerations will have a significant effect on a Master Portfolio’s portfolio strategies.

Each Master Portfolio may invest in certain securities traded in the over-the-counter (“OTC”) market and intends to deal directly with the dealers who make a market in the particular securities, except in those circumstances in which better prices and execution are available elsewhere. Under the 1940 Act, persons affiliated with a Master Portfolio and persons who are affiliated with such affiliated persons are prohibited from dealing with the Master Portfolio as principal in the purchase and sale of securities unless a permissive order allowing such transactions is obtained from the SEC. Since transactions in the OTC market usually involve transactions with the dealers acting as principal for their own accounts, the Master Portfolios will not deal with affiliated persons, including PNC and its affiliates, in connection with such transactions. However, an affiliated person of a Master Portfolio may serve as its broker in OTC transactions conducted on an agency basis provided that, among other things, the fee or commission received by such affiliated broker is reasonable and fair compared to the fee or commission received by non-affiliated brokers in connection with comparable transactions.

OTC issues, including most fixed income securities such as corporate debt and U.S. Government securities, are normally traded on a “net” basis without a stated commission, through dealers acting for their own account and not as brokers. The Master Portfolios will primarily engage in transactions with these dealers or deal directly with the issuer unless a better price or execution could be obtained by using a broker. Prices paid to a dealer with respect to both foreign and domestic securities will generally include a “spread,” which is the difference between the prices at which the dealer is willing to purchase and sell the specific security at the time, and includes the dealer’s normal profit.

Purchases of money market instruments by a Master Portfolio are made from dealers, underwriters and issuers. The Master Portfolios do not currently expect to incur any brokerage commission expense on such transactions because money market instruments are generally traded on a “net” basis with dealers acting as principal for their own accounts without a stated commission. The price of the security, however, usually includes a profit to the dealer. Each Master Portfolio intends to purchase only securities with remaining maturities of 13 months or less as determined in accordance with the rules of the SEC and the policies or investment objectives of the Fund and Master Portfolio. As a result, the portfolio turnover rates of a Master Portfolio will be relatively high. However, because brokerage commissions will not normally be paid with respect to investments made by a money market fund, the turnover rates should not adversely affect the Master Portfolio’s net asset values or net income.

A Master Portfolio will not purchase securities during the existence of any underwriting or selling group relating to such securities of which BFA, PNC or any affiliated person (as defined in the 1940 Act) thereof is a member except pursuant to procedures adopted by the Board in accordance with Rule 10f-3 under the 1940 Act. In no instance will portfolio securities be purchased from or sold to BFA, PNC or any affiliated person of the foregoing entities except as permitted by SEC exemptive order or by applicable law.

Portfolio Turnover. Portfolio turnover may vary from year to year, as well as within a year. Because the portfolios of the Funds consist of securities with relatively short-term maturities, the Funds expect to experience high portfolio turnover. A high portfolio turnover rate should not adversely affect the Funds since portfolio transactions ordinarily will be made directly with principals on a net basis and, consequently, the Funds usually will not incur brokerage expenses or excessive transaction costs.

Securities of Regular Broker-Dealers. As of December 31, 2012, none of the Master Portfolios owned securities of their “regular brokers or dealers” (as defined in the 1940 Act) or their parents, except as disclosed below:


Master Portfolio	Regular Broker-Dealer or Parent	Debt (D)/Equity (E)	Amount

Money Market Master Portfolio	Natixis	D	$550,000,000

Money Market Master Portfolio	Credit Suisse AG	D	$384,000,000

Prime Money Market Master Portfolio	Svenska Handelsbanken	D	$425,000,000

Prime Money Market Master Portfolio	Natixis	D	$215,000,000

Distributions and Taxes

The following information supplements, and should be read in conjunction with, the section in each Prospectus entitled “Account Information — Taxes.” The Prospectuses generally describe the U.S. federal income tax

treatment of distributions by the Funds. This section of the SAI provides additional information concerning U.S. federal income taxes. It is based on the U.S. Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as of the date of this SAI and all of which are subject to change, including changes with retroactive effect. The following discussion does not address any state, local or foreign tax matters.

A shareholder’s tax treatment may vary depending upon his or her particular situation. This discussion only applies to shareholders who are U.S. persons, i.e. , U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax and hold Fund shares as capital assets within the meaning of the Internal Revenue Code. Except as otherwise noted, it may not apply to certain types of shareholders who may be subject to special rules, such as insurance companies, tax-exempt organizations, shareholders holding Fund shares through tax-advantaged accounts (such as 401(k) plan accounts or individual retirement accounts (“IRAs”)), financial institutions, broker-dealers, entities that are not organized under the laws of the United States or a political subdivision thereof, persons who are neither citizens nor residents of the United States, shareholders holding Fund shares as part of a hedge, straddle or conversion transaction, and shareholders who are subject to the U.S. federal alternative minimum tax.

The Trust has not requested and will not request an advance ruling from the Internal Revenue Service (the “IRS”) as to the U.S. federal income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. In addition, the foregoing discussion and the discussions in the Prospectuses applicable to each shareholder address only some of the U.S. federal income tax considerations generally affecting investments in the Funds. Prospective shareholders are urged to consult with their own tax advisers and financial planners as to the particular U.S. federal tax consequences to them of an investment in the Funds, as well as the applicability and effect of any state, local or foreign laws, and the effect of possible changes in applicable tax laws.

Qualification as a Regulated Investment Company. Each Fund has elected to be treated, has qualified and intends to continue to qualify each year, as a “regulated investment company” under Subchapter M of the Internal Revenue Code as long as such qualification is in the best interests of the Fund’s shareholders. Each Fund will be treated as a separate entity for U.S. federal income tax purposes. Thus, the provisions of the Internal Revenue Code applicable to regulated investment companies generally will apply separately to each Fund, even though each Fund is a series of a trust. Furthermore, each Fund separately determines its income, gains, losses and expenses for U.S. federal income tax purposes.

In order to qualify as a regulated investment company under the Internal Revenue Code, each Fund must, among other things, derive at least 90% of its annual gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income attributable to its business of investing in such stock, securities or foreign currencies (including, but not limited to, gains from options, futures or forward contracts) and net income derived from an interest in a qualified publicly-traded partnership as defined in Section 851(h) of the Internal Revenue Code. Pursuant to regulations that may be promulgated in the future, the IRS may limit qualifying income from foreign currency gains to the amount of such currency gains that are directly related to a regulated investment company’s principal business of investing in stock or securities. Each Fund must also diversify its holdings so that, at the end of each quarter of each taxable year: (i) at least 50% of the value of its assets consists of (A) cash and cash items (including receivables), U.S. government securities and securities of other regulated investment companies, and (B) other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer and (ii) not more than 25% of the value of the Fund’s total assets is invested in (A) the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer, (B) the securities (other than the securities of other regulated investment companies) of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (C) the securities of one or more qualified publicly-traded partnerships. The qualifying income and diversification requirements applicable to a Fund may limit the extent to which it can engage in transactions in options, futures contracts, forward contracts and swap agreements.

In addition, each Fund generally must distribute to its shareholders an amount equal to or exceeding the sum of (i) 90% of its “investment company taxable income,” as that term is defined in the Internal Revenue Code (which generally includes, among other things, dividends, taxable interest, and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses) without regard to the deduction for dividends paid and (ii) 90% of its net tax-exempt income earned in each taxable year. A Fund generally will not be subject to U.S. federal income tax on the investment company taxable income and “net capital gain” ( i.e. , the excess of net long-term capital gain over net short-term capital loss) it distributes to its shareholders. However, if a Fund meets such distribution requirements, but chooses to retain some portion of its investment company taxable income or net capital gain, it generally will be subject to U.S. federal income tax at regular corporate rates on the amount retained. Although dividends generally will be treated as distributed when paid, if a Fund declares a distribution to shareholders of record in October, November or December of one year and pays the distribution by January 31 of the following year, the Fund and its shareholders will be treated as if the Fund paid the distribution by December 31 of the calendar year in which it was declared. Each Fund intends to distribute its net income and gain in a timely manner to maintain its status as a regulated investment company and eliminate fund-level U.S. federal income taxation of such income and gain. However, no assurance can be given that a Fund will not be subject to U.S. federal income taxation.

If, in any taxable year, a Fund fails to qualify as a regulated investment company under the Internal Revenue Code, notwithstanding the availability of certain relief provisions, or fails to meet the distribution requirements described above, the Fund would be taxed in the same manner as an ordinary U.S. corporation without any deduction for distributions to shareholders, and all distributions from the Fund’s earnings and profits (including any distributions of net tax-exempt income and net capital gain) to its shareholders would also be taxable as ordinary income at the shareholder level. To qualify again to be taxed as a regulated investment company in a subsequent year, the Fund may be required to pay an interest charge and penalty to the IRS as well as distribute to its shareholders its earnings and profits attributable to non-regulated investment company years. In addition, if the Fund fails to qualify as a regulated investment company for a period greater than two taxable years, the Fund may be required to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if the Fund had been liquidated) or, alternatively, to be subject to taxation on such built-in gain recognized for a period of ten years, in order to qualify as a regulated investment company in a subsequent year.

Excise Tax. A 4% non-deductible excise tax will be imposed on each Fund to the extent it fails to distribute during each calendar year (i) at least 98% of its ordinary income (excluding capital gains and losses) for the calendar year, (ii) at least 98.2% of its net capital gain income (generally the excess of capital gains over capital losses as adjusted for ordinary losses) for the 12 month period ending on October 31, and (iii) all of its ordinary income and net capital gain income from previous years that was not distributed or subject to tax during such years. Each Fund intends to distribute substantially all of its net income and gains, if any, by the end of each calendar year and, thus, expects not to be subject to the excise tax. However, no assurance can be given that a Fund will not be subject to the excise tax.

Capital Loss Carry-forwards. For taxable years of a Fund beginning after December 22, 2010, a Fund is permitted to carry forward indefinitely a net capital loss to offset its capital gains, if any, and such loss retains its character as either short-term or long-term capital loss. For taxable years of a Fund beginning before December 23, 2010, a Fund is permitted to carry forward a net capital loss from any year to offset its capital gains, if any, realized during the eight years following the year of the loss, and such loss is treated as a short-term capital loss in the year to which it is carried. Net capital losses incurred in taxable years of a Fund beginning before December 23, 2010 may not be used to offset capital gains until all net capital losses incurred in taxable years of a Fund beginning after December 22, 2010 have been utilized. As a result, some net capital losses incurred in taxable years of a Fund beginning before December 23, 2010 may expire unutilized. If future capital gains are offset by carried-forward capital losses, such future capital gains are not subject to Fund-level U.S. federal income taxation, regardless of whether they are distributed to shareholders.

Accordingly, the Funds do not expect to distribute any such capital gains. The Funds cannot carry back or carry forward any net operating losses. As a money market fund, each Fund does not expect to have material capital loss carry-forwards, but no assurance can be given to this effect.

Investment through the Master Portfolios . The Funds seek to continue to qualify as regulated investment companies by investing their assets through the Master Portfolios. Each Master Portfolio is treated as a non-publicly traded partnership (or, in the event that a Fund is the sole investor in a Master Portfolio, as disregarded from the Fund) for U.S. federal income tax purposes rather than as a regulated investment company or a corporation under the Internal Revenue Code. Under the rules applicable to a non-publicly traded partnership (or disregarded entity), a proportionate share of any interest, dividends, gains and losses of a Master Portfolio will be deemed to have been realized by ( i.e. , “passed-through” to) its investors, including the corresponding Fund, regardless of whether any amounts are actually distributed by the Master Portfolio. Each investor in a Master Portfolio will be taxable on such share, as determined in accordance with the governing instruments of the particular Master Portfolio, the Internal Revenue Code and Treasury Regulations. Therefore, to the extent that a Master Portfolio were to accrue but not distribute any income or gains, the corresponding Fund would be deemed to have realized its proportionate share of such income or gains without receipt of any corresponding distribution. However, each of the Master Portfolios will seek to minimize recognition by its investors (such as the Funds) of income and gains without a corresponding distribution. Furthermore, each Master Portfolio’s assets, income and distributions will be managed in such a way that an investor in a Master Portfolio will be able to continue to qualify as a regulated investment company by investing its assets through the Master Portfolio.

Taxation of Fund Investments. In general, if a Fund realizes gains or losses on the sale of portfolio securities, such gains or losses are capital gains or losses. If the Fund has held the disposed securities for more than one year at the time of disposition, such gains and losses generally are treated as long-term capital gains or losses.

If a Fund purchases a debt obligation with original issue discount (“OID”), generally at a price less than its principal amount, such as a zero-coupon bond, the Fund may be required to annually include in its taxable income a portion of the OID as ordinary income, even though the Fund will not receive cash payments for such discount until maturity or disposition of the obligation. A portion of the OID includible in income with respect to certain high-yield corporate debt securities may be treated as a dividend for U.S. federal income tax purposes. Gains recognized on the disposition of a debt obligation (including a municipal obligation) purchased by a Fund at a market discount, usually at a price less than its principal amount, generally will be treated as ordinary income to the extent of the portion of market discount which accrued, but was not previously recognized pursuant to an available election, during the term that the Fund held the debt obligation. A Fund generally will be required to make distributions to shareholders representing the OID on debt securities that is currently includible in income, even though the cash representing such income may not have been received by the Fund. Cash to pay such distributions may be obtained from borrowing or from sales of securities held by a Fund which the Fund otherwise might have continued to hold.

If an option granted by a Fund lapses or is terminated through a closing transaction, such as a repurchase by the Fund of the option from its holder, the Fund generally will realize a short-term capital gain or loss, depending on whether the premium income is greater or less than the amount paid by the Fund in the closing transaction. If securities are sold by a Fund pursuant to the exercise of a call option granted by it, the Fund will add the premium received to the sale price of the securities delivered in determining the amount of gain or loss on the sale. If securities are purchased by a Fund pursuant to the exercise of a put option written by it, the Fund will subtract the premium received from its cost basis in the securities purchased.

are not directly related to a Fund’s principal business of investing in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the Fund to satisfy the 90% income test described above. If the net foreign exchange loss for a year exceeds a Fund’s investment company taxable income (computed without regard to such loss), the resulting ordinary loss for such year will not be deductible by the Fund or its shareholders in future years.

If a Fund enters into a “constructive sale” of any appreciated financial position in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale occurs when a Fund enters into one of the following transactions with respect to the same or substantially identical property: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in Treasury Regulations that may be promulgated in the future. The character of the gain from constructive sales will depend upon a Fund’s holding period in the property. Losses from a constructive sale of property will be recognized when the property is subsequently disposed of. The character of such losses will depend upon a Fund’s holding period in the property and the application of various loss deferral provisions in the Internal Revenue Code. Constructive sale treatment does not apply to a transaction if such transaction is closed before the end of the 30th day after the close of the Fund’s taxable year, the Fund holds the appreciated financial position throughout the 60-day period beginning with the day such transaction was closed, and the Fund’s risk of loss with respect to such position is not reduced at any time during such 60-day period.

In addition to the investments described above, prospective shareholders should be aware that other investments made by the Funds may involve sophisticated tax rules that may result in income or gain recognition by the Funds without corresponding current cash receipts. Although the Funds seek to avoid significant non-cash income, such non-cash income could be recognized by the Funds, in which case the Funds may distribute cash derived from other sources in order to meet the minimum distribution requirements described above. In this regard, the Funds could be required at times to liquidate investments prematurely in order to satisfy their minimum distribution requirements.

Taxation of Distributions. For U.S. federal income tax purposes, a Fund’s earnings and profits, described above, are determined at the end of the Fund’s taxable year and are allocated pro rata to distributions made throughout the entire year in the case of a Fund with a calendar taxable year. In the case of a Fund with a non-calendar taxable year, a Fund’s earnings and profits are allocated first to distributions made on or before December 31 of the taxable year, and then to distributions made after December 31 of the taxable year. All distributions paid out of a Fund’s earnings and profits (as determined at the end of the year), whether paid in cash or reinvested in the Fund, generally are deemed to be taxable distributions and must generally be reported on each Fund shareholder’s U.S. federal income tax return. Distributions in excess of a Fund’s earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in the shareholder’s Fund shares and any such amount in excess of that basis as capital gain from the sale of shares, as discussed below. A Fund may make distributions in excess of earnings and profits to a limited extent, from time to time.

In general, assuming that each Fund has sufficient earnings and profits, distributions from investment company taxable income are taxable as ordinary income. Since each Fund’s income is derived from sources that do not pay “qualified dividend income,” as defined in Section 1(h)(11)(B) of the Internal Revenue Code, distributions from investment company taxable income of the Funds generally will not qualify for taxation at the maximum 20% U.S. federal income tax rate available to individuals on qualified dividend income.

Distributions reported by a Fund as a “capital gain dividend”, if any, will be taxed to shareholders as long-term capital gain (to the extent such distributions do not exceed the Fund’s actual net capital gain for the taxable year), regardless of how long a shareholder has held Fund shares. Each Fund will report capital gains dividends, if any, in a written statement furnished to its shareholders. Normally the Funds do not expect to realize or distribute a significant amount of long-term capital gains (if any).

Distributions from each Fund paid to corporate shareholders are not expected to qualify for the dividends-received deductions generally available to corporate taxpayers. The U.S. federal income tax status of all distributions will be reported to shareholders annually.

Some states will not tax distributions made to individual shareholders that are attributable to interest a Fund earned on direct obligations of the U.S. government if the Fund meets the state’s minimum investment or reporting requirements, if any. Investments in Ginnie Mae or Fannie Mae securities, bankers’ acceptances, commercial paper and repurchase agreements collateralized by U.S. government securities generally do not qualify for tax-free treatment. This exemption may not apply to corporate shareholders.

Sales of Fund Shares. Redemptions are treated as sales for tax purposes and generally are taxable events for shareholders that are subject to tax. In general, if Fund shares are sold, a shareholder will recognize gain or loss equal to the difference between the amount realized on the sale and the shareholder’s adjusted tax basis in the shares. As long as the Funds maintain a constant net asset value of $1.00 per share, generally no gain or loss should be recognized upon the sale of Fund shares. If a shareholder recognizes gain or loss on the sale of Fund shares, this gain or loss will be long-term capital gain or loss if the shareholder has held such Fund shares for more than one year at the time of the sale. If a shareholder receives a capital gain dividend with respect to any Fund share and such Fund share is held for six months or less, then (unless otherwise disallowed) any loss on the sale or exchange of that Fund share will be treated as a long-term capital loss to the extent of the capital gain dividend. Losses on redemptions or other dispositions of shares may be disallowed under “wash sale” rules in the event of other investments in the same Fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a redemption or other disposition of shares. In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments.

Foreign Taxes. Amounts realized by a Fund on foreign securities may be subject to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of a Fund’s total assets at the close of its taxable year were to consist of securities of non-U.S. corporations, the Fund would be eligible to file an annual election with the IRS pursuant to which the Fund could pass-through to its shareholders on a pro rata basis foreign income and similar taxes paid by the Fund, which could be claimed, subject to certain limitations, either as a tax credit or deduction by shareholders. However, none of the Funds expects to qualify for this election.

Federal Income Tax Rates. As of the date of this SAI, the maximum stated individual U.S. federal income tax rate applicable to (i) ordinary income generally is 39.6%; (ii) capital gain dividends is 20%; and (iii) long-term capital gains generally is 20%. In addition, a 3.8% Medicare contribution tax will be imposed on the net investment income (which includes, but is not limited to, interest, dividends and net gain from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married and filing jointly, and of trusts and estates, for taxable years beginning after December 31, 2012. An individual shareholder also should be aware that the benefits of the favorable tax rates applicable to capital gain dividends and long-term capital gains may be impacted by the application of the alternative minimum tax.

The current maximum stated corporate U.S. federal income tax rate applicable to ordinary income, capital gain dividends, and long-term capital gains generally is 35%. Actual marginal tax rates may be higher for some shareholders, for example, through reductions in deductions. Naturally, the amount of tax payable by any taxpayer will be affected by a combination of tax laws covering, for example, deductions, credits, deferrals, exemptions, sources of income and other matters.

IRS notifies the Fund that the shareholder’s TIN is incorrect or that the shareholder is subject to back-up withholding. This tax is not an additional U.S. federal income tax imposed on the shareholder, and the shareholder may claim the tax withheld as a tax payment on his or her federal income tax return, provided that the required information is furnished to the IRS. An investor must provide a valid TIN upon opening or reopening an account. If a shareholder fails to furnish a valid TIN upon request, the shareholder can also be subject to IRS penalties.

Tax-Deferred Plans. Shares of the Funds may be available for a variety of tax-deferred retirement and other tax-advantaged plans and accounts, including IRAs, Simplified Employee Pension Plans, Savings Incentive Match Plans for Employees, Roth IRAs, and Coverdell Education Savings Accounts. Prospective investors should contact their tax advisers and financial planners regarding the tax consequences to them of holding Fund shares through a tax-advantaged plan or account.

Foreign Shareholders. If you are a non-resident alien individual, foreign trust ( i.e. , a trust other than a trust which a U.S. court is able to exercise primary supervision over administration of that trust and one or more U.S. persons have authority to control substantial decisions of that trust), foreign estate ( i.e. , the income of which is not subject to U.S. tax regardless of source) or a foreign corporation (each, a “foreign shareholder”), the Fund’s ordinary income dividends (which include distributions of net short-term capital gains) are generally subject to a 30% U.S. federal income withholding tax, unless a lower treaty rate applies. With respect to taxable years of a Fund that begin before January 1, 2014, certain distributions reported by a Fund as interest-related dividends or short-term capital gains dividends, and paid to a foreign shareholder may be exempt from U.S. federal income withholding tax, provided that the Fund received proper certification of foreign status from the foreign shareholder, and other conditions are met. However, a Fund may choose not to report distributions in this manner. Notwithstanding the foregoing, if such distribution is “effectively connected” with a U.S. trade or business (or, if an income tax treaty applies, is attributable to a permanent establishment) of the recipient foreign shareholder, then the withholding tax and any related exemptions applicable to foreign persons generally will not apply, and the tax, reporting and withholding requirements applicable to U.S. persons will apply.

In general, a foreign shareholder’s capital gains realized on a disposition of Fund shares, if any, and capital gain distributions by a Fund, if any, will not be subject to U.S. federal income tax withholding, provided that the Fund obtains a properly completed and signed certificate of foreign status, unless: (i) such gains or distributions are “effectively connected” with a U.S. trade or business (or, if an income tax treaty applies, are attributable to a permanent establishment) of the foreign shareholder; or (ii) in the case of an individual foreign shareholder, the shareholder is present in the U.S. for a period or periods aggregating 183 days or more during the year of the sale and certain other conditions are met. If such capital gains or distributions are “effectively connected” with a U.S. trade or business or are attributable to a U.S. permanent establishment of the foreign shareholder pursuant to an income tax treaty, then the tax, reporting and withholding requirements applicable to U.S. persons apply. If such capital gains or distributions are not “effectively connected” for this purpose, but the foreign shareholder meets the requirements of clause (ii) described above, such gains and distributions will be subject to U.S. federal income withholding tax at a 30% rate (or a lower rate if so provided by an applicable income tax treaty).

If a foreign shareholder is a resident of a foreign country but is not a citizen or resident of the United States at the time of the shareholder’s death, Fund shares will be deemed to be property situated in the United States and will be subject to U.S. federal estate taxes (at current graduated rates of 18% to 40% of the total value, less allowable deductions and credits). The availability of reduced U.S. estate taxes pursuant to an applicable estate tax convention generally depends upon compliance with the established procedures for claiming the benefits thereof, and may, under certain circumstances, depend upon the foreign shareholder making a satisfactory demonstration to U.S. tax authorities that the shareholder qualifies as a foreign person under U.S. federal income tax laws and the applicable convention. In general, no U.S. federal gift tax will be imposed on gifts of Fund shares made by foreign shareholders.

Foreign shareholders should consult with their tax advisers regarding the tax consequences of an investment in a Fund.

Special rules apply to foreign partnerships and those holding Fund shares through foreign partnerships.

Recent Legislation. A 30% withholding tax may be imposed on dividends paid after December 31, 2013 and redemption proceeds paid after December 31, 2016 to (i) certain foreign financial institutions and investment funds, and (ii) certain other foreign entities. To avoid withholding, foreign financial institutions and investment funds will generally need to either (a) collect and report to the IRS detailed information identifying their U.S. accounts and U.S. account holders, comply with due diligence procedures for identifying U.S. accounts and withhold tax on certain payments made to noncomplying foreign entities and account holders or (b) if an intergovernmental agreement is entered into and implementing legislation is adopted, comply with the agreement and legislation. Other foreign entities will generally need to either provide detailed information identifying each substantial U.S. owner or certify there are no such owners.

Capital Stock

As of the date of this SAI, the beneficial interests in the Trust are divided into transferable shares of 27 separate and distinct series authorized and established by the Board of Trustees. The number of shares of each series, and class thereof, is unlimited and each share has no par value. The Board of Trustees may, in the future, authorize the issuance of other series representing shares of additional investment portfolios or funds. Except to the extent the 1940 Act expressly grants to shareholders the power to vote on such termination(s), the Trust, or any series (or class) thereof, may be terminated at any time by the Trustees with written notice to the shareholders.

Although the Trust is not required to hold regular annual shareholder meetings, occasional annual or special meetings may be required for purposes such as electing and removing Trustees, approving advisory contracts, and changing a Fund’s fundamental investment policies.

Voting. All shares of the Trust have equal voting rights and will be voted separately by individual series, except: (i) when required by the 1940 Act, shares will be voted in the aggregate and not by individual series; and (ii) when the Trustees have determined that the matter affects the interests of more than one series, then the shareholders of all such affected series will be entitled to vote thereon in the aggregate and not by individual series. The Trustees also may determine that a matter affects only the interests of one or more classes of a series, in which case any such matter will be voted on separately by such class or classes. For example, a change in a Fund’s fundamental investment policy would be voted upon only by shareholders of that Fund. Additionally, approval of a Master Portfolio’s Advisory Contract is a matter to be determined separately by each Master Portfolio. Approval by the shareholders of a Fund is effective as to that Fund whether or not sufficient votes are received from the shareholders of the other investment portfolios to approve the proposal as to those investment portfolios. As used in the Prospectuses of each Fund and in this SAI, the term “1940 Act majority,” when referring to approvals to be obtained from shareholders of a Fund, means the vote of the lesser of (i) 67% of the shares of the Fund represented at a meeting if the holders of more than 50% of the outstanding shares of the Fund are present in person or by proxy, or (ii) more than 50% of the outstanding shares of the Fund. The term “majority,” when referring to the approvals to be obtained from shareholders of the Trust as a whole, means the vote of the lesser of (i) 67% of the Trust’s shares represented at a meeting if the holders of more than 50% of the Trust’s outstanding shares are present in person or by proxy, or (ii) more than 50% of the Trust’s outstanding shares.

Each share will entitle the holder thereof to one vote for each dollar (and each fractional dollar thereof) of NAV (number of shares owned times NAV per share) of shares outstanding in such holder’s name on the books of the Trust. There shall be no cumulative voting in the election of Trustees. For additional voting information and a discussion of the possible effects of changes to a Master Portfolio’s investment objective or policies on a Fund, as an interestholder in the Master Portfolio, or the Fund’s shareholders, see “Description of the Funds and their Investments and Risks — Master/Feeder Structure” herein.

The Trust may dispense with an annual meeting of shareholders in any year in which it is not required to elect Trustees under the 1940 Act. However, the Trust will hold a special meeting of its shareholders for the purpose of voting on the question of removal of a Trustee or Trustees if requested in writing by the holders of at least 10% of the Trust’s outstanding voting securities, and to assist in communicating with other shareholders as required by Section 16(c) of the 1940 Act.

Dividends and Distributions. Each share of a Fund represents an equal proportional interest in the Fund with each other share and is entitled to such dividends and distributions out of the income earned on the assets belonging to the Fund as are declared in the discretion of the Trustees. In the event of the liquidation or dissolution of the Trust, shareholders of a Fund are entitled to receive the assets attributable to the Fund that are available for distribution, and a distribution of any general assets not attributable to a particular investment portfolio that are available for distribution in such manner and on such basis as the Trustees in their sole discretion may determine. Shareholders are not entitled to any preemptive rights. All shares, when issued, will be fully paid and non-assessable by the Trust.

Master Portfolios. MIP is an open-end, series management investment company organized as a Delaware statutory trust on October 20, 1993. MIP’s Declaration of Trust provides that obligations of MIP are not binding upon its Trustees individually but only upon the property of MIP and that the Trustees will not be liable for any action or failure to act, but nothing in the Declaration of Trust protects a Trustee against any liability to which the Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of the Trustee’s office.

Interests in each Master Portfolio of MIP have voting and other rights generally corresponding to those rights enumerated above for shares of the Funds. MIP also intends to dispense with annual meetings, but is required by Section 16(c) of the 1940 Act to hold a special meeting and assist investor communications under the circumstances described above with respect to the Trust. Whenever a Fund is requested to vote on a matter with respect to its Master Portfolio, the Fund will follow its voting procedures, as described in “Voting” above.

Additional Information on the Funds

The Trust provides annual and semi-annual reports to all shareholders. The annual reports contain audited financial statements and other information about the Funds, including additional information on performance. Shareholders may obtain a copy of the Trust’s most recent annual or semi-annual reports without charge by calling 1-888-204-3956 (toll-free).

The registration statement, including the Prospectuses, this SAI and the exhibits filed therewith, may be examined at the office of the SEC in Washington, D.C. Statements contained in the Prospectuses or this SAI as to the contents of any contract or other document referred to herein or in the Prospectuses are not necessarily complete and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.

No person has been authorized to give any information or to make any representations other than those contained in the Prospectuses, this SAI and in the Trust’s official sales literature in connection with the offer of the Trust’s shares and, if given or made, such other information or representations must not be relied upon as having been authorized by the Trust. This SAI does not constitute an offer in any state in which, or to any person to whom, such offering may not lawfully be made.

Financial Statements

The audited financial statements, including the schedule of investments, financial highlights and independent registered public accounting firm’s reports for the fiscal year ended December 31, 2012 for each Fund and related Master Portfolio are hereby incorporated by reference to the Trust’s annual report, as filed with the SEC on March 1, 2013. The annual report, which contains the referenced audited financial statements, is available upon request and without charge.

APPENDIX A

BlackRock ^®

U.S. Registered Funds

Proxy Voting Policy

Procedures Governing Delegation of Proxy Voting to Fund Adviser

July 1, 2011

A-1

Introduction

The Trustees/Directors (“Directors”) of the BlackRock-Advised Funds (the “Funds”) have the responsibility for voting proxies relating to portfolio securities of the Funds, and have determined that it is in the best interests of the Funds and their shareholders to delegate that responsibility to BlackRock Advisors, LLC and its affiliated U.S. registered investment advisers (“BlackRock”), the investment adviser to the Funds, as part of BlackRock’s authority to manage, acquire and dispose of account assets. The Directors hereby direct BlackRock to vote such proxies in accordance with this Policy, and any proxy voting guidelines that the Adviser determines are appropriate and in the best interests of the Funds’ shareholders and which are consistent with the principles outlined in this Policy. The Directors have authorized BlackRock to utilize an unaffiliated third-party as its agent to vote portfolio proxies in accordance with this Policy and to maintain records of such portfolio proxy voting.

Rule 206(4)-6 under the Investment Advisers Act of 1940 requires, among other things, that an investment adviser that exercises voting authority over clients’ proxy voting adopt policies and procedures reasonably designed to ensure that the adviser votes proxies in the best interests of clients, discloses to its clients information about those policies and procedures and also discloses to clients how they may obtain information on how the adviser has voted their proxies.

BlackRock has adopted separate but substantially similar guidelines and procedures that are consistent with the principles of this Policy. BlackRock’s Corporate Governance Committee (the “Committee”), addresses proxy voting issues on behalf of BlackRock and its clients, including the Funds. The Committee is comprised of senior members of BlackRock’s Portfolio Management and Administration Groups and is advised by BlackRock’s Legal and Compliance Department.

BlackRock votes (or refrains from voting) proxies for each Fund in a manner that BlackRock, in the exercise of its independent business judgment, concludes are in the best economic interests of such Fund. In some cases, BlackRock may determine that it is in the best economic interests of a Fund to refrain from exercising the Fund’s proxy voting rights (such as, for example, proxies on certain non-U.S. securities that might impose costly or time-consuming in-person voting requirements). With regard to the relationship between securities lending and proxy voting, BlackRock’s approach is also driven by our clients’ economic interests. The evaluation of the economic desirability of recalling loans involves balancing the revenue producing value of loans against the likely economic value of casting votes. Based on our evaluation of this relationship, BlackRock believes that the likely economic value of casting a vote generally is less than the securities lending income, either because the votes will not have significant economic consequences or because the outcome of the vote would not be affected by BlackRock recalling loaned securities in order to ensure they are voted. Periodically, BlackRock analyzes the process and benefits of voting proxies for securities on loan, and will consider whether any modification of its proxy voting policies or procedures are necessary in light of any regulatory changes.

BlackRock will normally vote on specific proxy issues in accordance with BlackRock’s proxy voting guidelines. BlackRock’s proxy voting guidelines provide detailed guidance as to how to vote proxies on certain important or commonly raised issues. BlackRock may, in the exercise of its business judgment, conclude that the proxy voting guidelines do not cover the specific matter upon which a proxy vote is requested, or that an exception to the proxy voting guidelines would be in the best economic interests of a Fund. BlackRock votes (or refrains from voting) proxies without regard to the relationship of the issuer of the proxy (or any shareholder of such issuer) to the Fund, the Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates. When voting proxies, BlackRock attempts to encourage companies to follow practices that enhance shareholder value and increase transparency and allow the market to place a proper value on their assets.

II.

Proxy Voting Policies

A. Boards of Directors

The Funds generally support the board’s nominees in the election of directors and generally supports proposals that strengthen the independence of boards of directors. As a general matter, the Funds believe that a company’s board of directors (rather than shareholders) is most likely to have access to important, nonpublic information regarding a company’s business and prospects, and is therefore best-positioned to set corporate policy and oversee management. The Funds therefore believe that the foundation of good corporate governance is the election of responsible, qualified, independent corporate directors who are likely to diligently represent the interests of shareholders and oversee management of the corporation in a manner that will seek to maximize shareholder value over time. In individual cases, consideration may be given to a director nominee’s history of representing shareholder interests as a director of the company issuing the proxy or other companies, or other factors to the extent deemed relevant by the Committee.

A-2

B. Auditors

These proposals concern those issues submitted to shareholders related to the selection of auditors. As a general matter, the Funds believe that corporate auditors have a responsibility to represent the interests of shareholders and provide an independent view on the propriety of financial reporting decisions of corporate management. While the Funds anticipate that BlackRock will generally defer to a corporation’s choice of auditor, in individual cases, consideration may be given to an auditors’ history of representing shareholder interests as auditor of the company issuing the proxy or other companies, to the extent deemed relevant.

C. Compensation and Benefits

These proposals concern those issues submitted to shareholders related to management compensation and employee benefits. As a general matter, the Funds favor disclosure of a company’s compensation and benefit policies and oppose excessive compensation, but believe that compensation matters are normally best determined by a corporation’s board of directors, rather than shareholders. Proposals to “micro-manage” a company’s compensation practices or to set arbitrary restrictions on compensation or benefits should therefore generally not be supported.

D. Capital Structure

These proposals relate to various requests, principally from management, for approval of amendments that would alter the capital structure of a company, such as an increase in authorized shares. As a general matter, the Funds expect that BlackRock will support requests that it believes enhance the rights of common shareholders and oppose requests that appear to be unreasonably dilutive.

E. Corporate Charter and By-Laws

These proposals relate to various requests for approval of amendments to a corporation’s charter or by-laws. As a general matter, the Funds generally vote against anti-takeover proposals and proposals that would create additional barriers or costs to corporate transactions that are likely to deliver a premium to shareholders.

F. Environmental and Social Issues

These are shareholder proposals addressing either corporate social and environmental policies or requesting specific reporting on these issues. The Funds generally do not support proposals on social issues that lack a demonstrable economic benefit to the issuer and the Fund investing in such issuer. BlackRock seeks to make proxy voting decisions in the manner most likely to protect and promote the long-term economic value of the securities held in client accounts. We intend to support economically advantageous corporate practices while leaving direct oversight of company management and strategy to boards of directors. We seek to avoid micromanagement of companies, as we believe that a company’s board of directors is best positioned to represent shareholders and oversee management on shareholders behalf. Issues of corporate social and environmental responsibility are evaluated on a case-by-case basis within this framework.

III.

Conflicts Management

BlackRock maintains policies and procedures that are designed to prevent any relationship between the issuer of the proxy (or any shareholder of the issuer) and a Fund, a Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, from having undue influence on BlackRock’s proxy voting activity. In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard against potential conflicts of interest or as otherwise required by applicable law. The independent fiduciary may either vote such proxies or provide BlackRock with instructions as to how to vote such proxies. In the latter case, BlackRock votes the proxy in accordance with the independent fiduciary’s determination.

IV.

Reports to the Board

BlackRock will report to the Directors on proxy votes it has made on behalf of the Funds at least annually.

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SAI-CFA-0412

STATEMENT OF ADDITIONAL INFORMATION

B LACK R OCK F UNDS III

B LACK R OCK C ASH F UNDS : I NSTITUTIONAL

B LACK R OCK C ASH F UNDS : P RIME

B LACK R OCK C ASH F UNDS : G OVERNMENT

B LACK R OCK C ASH F UNDS : T REASURY

Dated April 30, 2013


Fund/Share Class

BlackRock Cash Funds: Institutional — SL Agency Shares		—

BlackRock Cash Funds: Prime — SL Agency Shares		—

BlackRock Cash Funds: Government — SL Agency Shares		—

BlackRock Cash Funds: Treasury — SL Agency Shares		—

BlackRock Funds III (the “Trust”) is an open-end, series management investment company. This combined Statement of Additional Information (“SAI”) contains additional information about SL Agency Shares of the following series of the Trust — BlackRock Cash Funds: Prime, BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each, a “Fund” and collectively, the “Funds”). The Funds have additional share classes which are described in separate prospectuses and a separate SAI.

Each Fund seeks to achieve its investment objective by investing all of its assets in a master portfolio of Master Investment Portfolio (“MIP”). BlackRock Cash Funds: Institutional invests in Money Market Master Portfolio; BlackRock Cash Funds: Prime invests in Prime Money Market Master Portfolio; BlackRock Cash Funds: Government invests in Government Money Market Master Portfolio; and BlackRock Cash Funds: Treasury invests in Treasury Money Market Master Portfolio (each, a “Master Portfolio” and collectively, the “Master Portfolios”). MIP is an open-end, series management investment company. BlackRock Fund Advisors (“BFA” or the “Investment Adviser”) serves as investment adviser to each Master Portfolio. References to the investments, investment policies and risks of a Fund, unless otherwise indicated, should be understood to include references to the investments, investment policies and risks of such Fund’s Master Portfolio.

This SAI is not a prospectus and should be read in conjunction with the current prospectus for SL Agency Shares of the Funds, dated April 30, 2013, as amended from time to time (the “Prospectus”). All terms used in this SAI that are defined in the Prospectus have the meanings assigned in the Prospectus. The audited financial statements for the Funds, which include the schedules of investments and report of the independent registered public accounting firm for the fiscal year ended December 31, 2012 are hereby incorporated by reference to the Funds’ annual reports, semi-annual reports and prospectus for SL Agency Shares of the Funds. Copies of such prospectus, annual reports and semi-annual reports may be obtained without charge by writing to State Street Corporation, Institutional Transfer Agency, P.O. Box 5493, Boston, Massachusetts 02206, or by calling 1-888-204-3956 (toll-free).

TABLE OF CONTENTS


	Page

History of the Trust		1

Description of the Funds and their Investments and Risks		1

Investment Objectives and Policies		1

Master/Feeder Structure		1

Investment Restrictions		2

Fundamental Investment Restrictions of the Funds		2

Non-Fundamental Investment Restrictions of the Funds		3

Investments and Risks		4

Asset-Backed and Commercial Mortgage-Backed Securities		5

Bank Obligations		5

Commercial Paper and Short-Term Corporate Debt Instruments		6

Asset-Backed Commercial Paper		7

Floating-Rate and Variable-Rate Obligations		7

Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions		7

Funding Agreements		7

Illiquid Securities		8

Investment Company Securities		8

Letters of Credit		8

Loans of Portfolio Securities		8

Loan Participation Agreements		9

Medium-Term Notes		9

Mortgage Pass-Through Securities		9

Mortgage Securities		11

Municipal Securities		11

Non-U.S. Obligations		12

Participation Interests		12

Regulation Regarding Derivatives		12

Repurchase Agreements		12

Restricted Securities		13

Unrated Investments		13

U.S. Government Obligations		13

U.S. Treasury Obligations		14

Disclosure of Portfolio Holdings		14

Management		17

Share Ownership Information		25

Ownership of Securities of Certain Entities		25


	Page

Compensation of Trustees		25

Codes of Ethics		27

Proxy Voting Policies of the Master Portfolios		27

Shareholder Communication to the Board of Trustees		27

Potential Conflicts of Interest		28

Control Persons and Principal Holders of Securities		34

Investment Adviser and Other Service Providers		35

Investment Adviser		35

Advisory Fees		35

Administrator		36

Distributor		37

Custodian		37

Transfer and Dividend Disbursing Agent		38

Independent Registered Public Accounting Firm		38

Determination of Net Asset Value		38

Purchase, Redemption and Pricing of Shares		39

Terms of Purchase and Redemption		39

In-Kind Purchases		39

Suspension of Redemption Rights or Payment of Redemption Proceeds		39

Declaration of Trust Provisions Regarding Redemptions at Option of Trust		40

Portfolio Transactions		40

General		40

Portfolio Turnover		41

Securities of Regular Broker-Dealers		42

Distributions and Taxes		42

Qualification as a Regulated Investment Company		42

Excise Tax		43

Capital Loss Carry-Forwards		44

Investment Through the Master Portfolios		44

Taxation of Fund Investments		44

Taxation of Distributions		45

Sales of Fund Shares		46

Foreign Taxes		46

Federal Income Tax Rates		46

Back-Up Withholding		47

Tax-Deferred Plans		47

Foreign Shareholders		47

Recent Legislation		48


	Page

Capital Stock		48

Voting		48

Dividends and Distributions		49

Master Portfolios		49

Additional Information on the Funds		49

Financial Statements		50

Appendix A		A-1

iii

History of the Trust

The Trust consists of multiple series, including BlackRock Cash Funds: Prime, BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury (each, a “Fund” and collectively, the “Funds”). Each Fund issues shares in multiple classes, currently including SL Agency, Premium, Capital, Institutional, Select and Trust Shares, and with respect only to BlackRock Cash Funds: Institutional, Aon Captives Shares. The SL Agency Shares are discussed in this Statement of Additional Information.


Fund		Master Portfolio in Which the Fund Invests
BlackRock Cash Funds: Prime		Prime Money Market Master Portfolio

BlackRock Cash Funds: Institutional		Money Market Master Portfolio

BlackRock Cash Funds: Government		Government Money Market Master Portfolio

BlackRock Cash Funds: Treasury		Treasury Money Market Master Portfolio

The Trust’s principal office is located at 400 Howard Street, San Francisco, California 94105.

Description of the Funds and their Investments and Risks

Investment Objectives and Policies. The Trust is an open-end, series management investment company.

The Funds and the Master Portfolios in which they invest are diversified funds as defined in the 1940 Act. Each Fund’s investment objective is set forth in the Prospectus. Each Fund’s investment objective is non-fundamental and can be changed by the Trust’s Board of Trustees without shareholder approval. The investment objective and investment policies of a Fund determine the types of portfolio securities in which the Fund invests, the degree of risk to which the Fund is subject and, ultimately, the Fund’s performance. There can be no assurance that the investment objective of any Fund will be achieved.

Master/Feeder Structure. Each Fund seeks to achieve its investment objective by investing all of its assets in the corresponding Master Portfolio of MIP. The Trust’s Board of Trustees believes that under normal circumstances, none of the Funds or their shareholders will be adversely affected by investing Fund assets in a Master Portfolio. However, if a mutual fund or other investor redeems its interests from a Master Portfolio, the economic efficiencies ( e.g. , spreading fixed expenses over a larger asset base) that the Trust’s Board of Trustees believes may be available through a Fund’s investment in such Master Portfolio may not be fully achieved. In addition, although unlikely, the master/feeder structure may give rise to accounting or operational difficulties.

Investment Restrictions

Fundamental Investment Restrictions of the Funds. The Funds are subject to the following investment restrictions, all of which are fundamental policies. Each Fund may not:

(3) Borrow money or issue senior securities, except to the extent permitted under the 1940 Act, including the rules, regulations and any orders obtained thereunder;

(5) Underwrite securities of other issuers, except to the extent that the purchase of permitted investments directly from the issuer thereof or from an underwriter for an issuer and the later disposition of such securities in accordance with the Fund’s investment program may be deemed to be an underwriting; and provided further, that the purchase by the Fund of securities issued by an open-end management investment company, or a series thereof, with substantially the same investment objective, policies and restrictions as the Fund shall not constitute an underwriting for purposes of this paragraph;

BlackRock Cash Funds: Government and BlackRock Cash Funds: Treasury have adopted the following investment restriction as an additional non-fundamental policy:

BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional have adopted the following investment restrictions as additional non-fundamental policies:

(1) Each Fund may not purchase interests, leases, or limited partnership interests in oil, gas, or other mineral exploration or development programs.

(3) Each Fund may not purchase securities on margin (except for short-term credits necessary for the clearance of transactions) or make short sales of securities.

Investment Risks

120 days. The securities in which each Fund invests may not yield as high a level of current income as may be achieved from securities with less liquidity and less safety. There can be no assurance that a Fund’s investment objective will be realized as described in the Prospectus.

BlackRock Cash Funds: Prime and BlackRock Cash Funds: Institutional may invest in any of the instruments or engage in any practice described below.

CDs are negotiable certificates evidencing the obligation of a bank to repay funds deposited with it for a specified period of time.

The Funds also may invest in non-convertible corporate debt securities ( e.g ., bonds and debentures) with not more than thirteen months remaining to maturity at the date of settlement. A Fund will invest only in such corporate bonds and debentures that are deemed appropriate by BFA in accordance with Rule 2a-7 under the 1940 Act. Subsequent to its purchase by a Fund, an issue of securities may cease to be rated or its rating may be reduced below the minimum rating required for purchase by the Fund. BFA will consider such an event in

determining whether the Fund should continue to hold the obligation. To the extent the Fund continues to hold the obligation, it may be subject to additional risk of default.

Funding Agreements. The Funds may invest in short-term funding agreements. A funding agreement is a contract between an issuer and a purchaser that obligates the issuer to pay a guaranteed rate of interest on a principal sum deposited by the purchaser. Funding agreements will also guarantee the return of principal and may guarantee a stream of payments over time. A funding agreement has a fixed maturity and may have either a fixed-, variable- or floating-interest rate that is based on an index and guaranteed for a fixed time

period. The Funds will purchase short-term funding agreements only from banks and insurance companies. The Funds may also purchase Guaranteed Investment Contracts.

Loans of Portfolio Securities. ⁽¹⁾ Each Fund may lend portfolio securities to certain creditworthy borrowers, including borrowers affiliated with BFA. The borrowers provide collateral that is maintained in an amount at least equal to the current market value of the securities loaned plus any accrued interest. A Fund may terminate a loan at any time and obtain the return of the securities loaned. Each Fund is entitled to receive the value of any interest or cash or non-cash distributions paid on the loaned securities.

⁽¹⁾

Note that “Loans of Portfolio Securities” describes lending of securities by the Funds/Master Portfolios. SL Agency Shares of the Funds are designed, among other things, for the investment of cash collateral provided by borrowers to lenders of securities for which BTC acts as securities lending agent.

securities. Any cash collateral may be reinvested in certain short-term instruments either directly on behalf of each lending Fund or through one or more joint accounts or money market funds, including those managed by BFA; such reinvestments are subject to investment risk.

Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation. In the basic mortgage pass-through structure, mortgages with similar issuer, term and coupon characteristics are collected and aggregated into a “pool” consisting of multiple mortgage loans. The pool is assigned a CUSIP number and undivided interests in the pool are traded and sold as pass-through securities. The holder of the security is entitled to a pro rata share of principal and interest payments (including unscheduled prepayments) from the pool of mortgage loans.

monitor the creditworthiness of such counterparties. The use of TBA rolls may cause the Funds to experience higher portfolio turnover and to pay higher capital gain distributions, which may result in larger amounts of short-term capital gains allocable to shareholders.

There is no guarantee that income from municipal securities will be exempt from federal and state taxes. Changes in federal or state tax treatment of municipal securities may make municipal securities less attractive as investments or cause them to lose value.

Each Fund will invest in high-quality, long-term municipal bonds, municipal notes and short-term commercial paper with remaining maturities not exceeding 397 calendar days.

These include differences in accounting, auditing and financial reporting standards, the possibility of expropriation or potentially confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investments in non-U.S. countries, potential restrictions of the flow of international capital and transaction costs of foreign currency conversions. Non-U.S. issuers may be subject to less governmental regulation than U.S. issuers. Moreover, individual non-U.S. economies may differ favorably or unfavorably from the U.S. economy with respect to growth of gross domestic product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions.

The Funds may invest in U.S. dollar-denominated short-term obligations issued or guaranteed by one or more foreign governments or any of their political subdivisions, agencies or instrumentalities that are determined by BFA to be of comparable quality to the other obligations in which the Funds may invest. The Funds may also invest in debt obligations of supranational entities. Supranational entities include international organizations designated or supported by governmental entities to promote economic reconstruction or development and international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the World Bank), the Asian Development Bank and the InterAmerican Development Bank. The percentage of each Fund’s assets invested in obligations of foreign governments and supranational entities will vary depending on the relative yields of such securities, the economic and financial markets of the countries in which the investments are made and the interest rate climate of such countries.

In any repurchase transaction, the collateral for a repurchase agreement may include (i) cash items; (ii) obligations issued by the U.S. Government or its agencies or instrumentalities; or (iii) obligations that, at the time the repurchase agreement is entered into, are rated in the highest category generally by at least two nationally recognized statistical rating organizations (“NRSRO”), or, if unrated, determined to be of comparable quality by BFA. Collateral, however, is not limited to the foregoing and may include for example obligations rated below the highest category by NRSROs. Collateral for a repurchase agreement may also include securities that a Fund could not hold directly without the repurchase obligation. Irrespective of the type of collateral underlying the repurchase agreement, in the case of a repurchase agreement entered into by a money market fund, the repurchase obligation of a seller must involve minimal credit risk to a Fund, and otherwise satisfy credit quality standards set forth in the Fund’s Rule 2a-7 procedures.

for ultimate repayment, which agency or instrumentality may be privately owned. There can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it is not obligated to do so. As a general matter, the value of debt instruments, including U.S. government obligations, declines when market interest rates increase and rises when market interest rates decrease. Certain types of U.S. government obligations are subject to fluctuations in yield or value due to their structure or contract terms.

Disclosure of Portfolio Holdings

Pursuant to the Guidelines, the Trust, MIP and BFA may, under certain circumstances as set forth below, make selective disclosure with respect to a Fund’s or Master Portfolio’s portfolio holdings. The Boards of Trustees of the Trust and MIP have approved the adoption by the Trust and MIP, respectively, of the Guidelines, and employees of BFA are responsible for adherence to the Guidelines. The Boards of Trustees of the Trust and MIP provide ongoing oversight of the Trust’s, MIP’s and BFA’s compliance with the Guidelines. Examples of the types of information that may be disclosed pursuant to the Guidelines are provided below. This information may be both material non-public information (“Confidential Information”) and proprietary information of BlackRock. Information that is non-material or that may be obtained from public sources (i.e., information that has been publicly disclosed via a filing with the SEC ( e.g. , fund annual report), through a press release or placement on a publicly-available internet website) shall not be deemed Confidential Information.

shareholders, prospective shareholders, consultants and third-party data providers upon request, as soon as such data is available. Data on number of shareholders (total and by share class) and benchmark returns (including performance measures such as standard deviation, information ratio, Sharpe ratio, alpha, and beta) are generally available to shareholders, prospective shareholders, consultants and third-party data providers as soon as such data is released after month-end.

1. Month-end portfolio characteristics are available to shareholders, prospective shareholders, intermediaries and consultants on the fifth calendar day after month-end. ¹

2. Fund Fact Sheets, which contain certain portfolio characteristics, are available, in both hard copy and electronically, to shareholders, prospective shareholders, intermediaries and consultants on a monthly or quarterly basis no earlier than the fifth calendar day after the end of a month or quarter.

3. Money Market Performance Reports, which contain money market fund performance for the recent month, rolling 12-month average yields and benchmark performance, are available on a monthly basis to shareholders, prospective shareholders, intermediaries and consultants by the tenth calendar day of the month. This information may also be obtained electronically upon request.

Portfolio Holdings . In addition to position description, portfolio holdings may also include issuer name, CUSIP, ticker symbol, total shares and market value for equity portfolios and issuer name, CUSIP, ticker symbol, coupon, maturity, current face value and market value for fixed income portfolios. Other information that may be provided includes quantity, SEDOL, market price, yield, weighted average life, duration and convexity of each security in a Fund as of a specific date.

The following shall not be deemed to be a disclosure of Confidential Information:

•

Generally, month-end portfolio holdings may be made available to fund shareholders, prospective shareholders, intermediaries, consultants and third party data providers ( e.g. , Lipper, Morningstar and Bloomberg) on the 20th calendar day after the end of each month, except for BlackRock Global Allocation Fund, Inc., BlackRock Global Dynamic Equity Fund, BlackRock Global Allocation Portfolio of BlackRock Series Fund, Inc. and BlackRock Global Allocation V.I. Fund of BlackRock Variable Series Funds, Inc., whose holdings may be made available on the 40th calendar day after the end of the quarter (based on each Fund’s fiscal year end). ¹

•

Weekly portfolio holdings made available to fund shareholders, prospective shareholders, intermediaries and consultants on the next business day after the end of the weekly period.

•

¹	The precise number of days specified above may vary slightly from period to period depending on whether the specified calendar day falls on a weekend or holiday.

Implementation . All BlackRock employees must adhere to the Guidelines when responding to inquiries from shareholders, prospective shareholders, consultants, and third-party databases. The Trust’s or MIP’s Chief Compliance Officer is responsible for oversight of compliance with the Guidelines and will recommend to the Board of Trustees of the Trust or MIP, as applicable, any changes to the Guidelines that he or she deems necessary or appropriate to ensure the Funds’, the Master Portfolios’ and BlackRock’s compliance.

Ongoing Arrangements. BFA has entered into ongoing agreements to provide selective disclosure of Fund or Master Portfolio portfolio holdings to the following persons or entities:

Trust’s Board of Trustees, MIP’s Board of Trustees and, if necessary, Independent Trustees’ counsel and Trust/MIP counsel

Trust’s/MIP’s Transfer Agent

Trust’s/MIP’s Custodian

Trust’s/MIP’s Administrator, if applicable

Trust’s/MIP’s independent registered public accounting firm

Trust’s/MIP’s accounting services provider

Independent rating agencies — Morningstar, Inc., Lipper Inc., S&P, Moody’s, Fitch

Information aggregators — Markit on Demand, Thomson Financial, Bloomberg, eVestments Alliance, Informa/PSN, Investment Solutions, Crane Data, and iMoneyNet

Sponsors of 401(k) plans that include BlackRock-advised funds — E.I. Dupont de Nemours and Company, Inc.

10.

11.

Pricing Vendors — Reuters Pricing Service, Bloomberg, FT Interactive Data (FT IDC), ITG, Telekurs Financial, FactSet Research Systems, Inc., JP Morgan Pricing Direct (formerly Bear Stearns Pricing Service), Standard and Poor’s Security Evaluations Service, Lehman Index Pricing, Bank of America High Yield Index, Loan Pricing Corporation (LPC), LoanX, Super Derivatives, iBOXX Index, Barclays Euro Gov’t Inflation-Linked Bond Index, JPMorgan Emerging & Developed Market Index, Reuters/WM Company, Nomura BPI Index, Japan Securities Dealers Association, Valuation Research Corporation and Murray, Devine & Co., Inc.

12.

Portfolio Compliance Consultants — Oracle/i-Flex Solutions, Inc.

13.

14.

15.

Other — Investment Company Institute

The Trust, MIP and BFA monitor, to the extent possible, the use of Confidential Information by the individuals or firms to which it has been disclosed. To do so, in addition to the requirements of any applicable confidentiality agreement and/or the terms and conditions of the Trust’s, MIP’s and BFA’s Code of Ethics and Code of Business Conduct and Ethics — all of which require persons or entities in possession of Confidential Information to keep such information confidential and not to trade on such information for their own benefit — BFA’s compliance personnel under the supervision of the Trust’s or MIP’s Chief Compliance Officer, monitor BFA’s securities trading desks to determine whether individuals or firms who have received Confidential Information have made any trades on the basis of that information. In addition, BFA maintains an internal restricted list to prevent trading by the personnel of BFA or its affiliates in securities — including securities held by a Fund/Master Portfolio — about which BFA has Confidential Information. There can be no assurance, however, that the Trust’s or MIP’s policies and procedures with respect to the selective disclosure of portfolio holdings will prevent the misuse of such information by individuals or firms that receive such information.

Management

The Board consists of fourteen individuals (each, a “Trustee”), twelve of whom are not “interested persons as defined in the 1940 Act, (“Independent Trustees”). The same fourteen individuals serve on the Board of Trustees of MIP and the same twelve Trustees are Independent Trustees with respect to MIP. The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of closed-end funds (the “Closed-End Complex”), two complexes of open-end funds (the “Equity-Liquidity Complex” and the “Equity-Bond Complex”) and one complex of exchange-traded funds (each, a “BlackRock Fund Complex”). The Trust and MIP are included in the BlackRock Fund Complex referred to as the Equity-Liquidity Complex. The Trustees also oversee as board members the operations of the other open-end registered investment companies included in the Equity-Liquidity Complex.

service providers, as applicable, it is not possible to eliminate all of the risks applicable to the Funds. Risk oversight forms part of the Board’s general oversight of the Funds and is addressed as part of various Board and Committee activities. The Board, directly or through a Committee, also reviews reports from, among others, management, the independent registered public accounting firm for the Funds, sub-advisers, and internal auditors for the investment adviser or its affiliates, as appropriate, regarding risks faced by the Funds and management’s or the service provider’s risk functions. The Committee system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates effective oversight of compliance with legal and regulatory requirements and of the Funds’ activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the implementation and testing of the Funds’ compliance program and reports to the Board regarding compliance matters for the Funds and their service providers. The Independent Trustees have engaged independent legal counsel to assist them in performing their oversight responsibilities.

The members of the Audit Committee (the “Audit Committee”) are Kenneth L. Urish (Chair), Herbert I. London, Robert C. Robb, Jr. and Frederick W. Winter, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee are to approve the selection, retention, termination and compensation of the Trust’s independent registered public accounting firm (the “independent auditors”) and to oversee the independent auditors’ work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and independence of the independent auditors; (2) approve all audit engagement terms and fees for each Fund; (3) review the conduct and results of each independent audit of each Fund’s financial statements; (4) review any issues raised by the independent auditors or Trust management regarding the accounting or financial reporting policies and practices of each Fund and the internal controls of each Fund and certain service providers; (5) oversee the performance of each Fund’s independent auditors; (6) review and discuss with management and each Fund’s independent auditors the performance and findings of the Fund’s internal auditors (7) discuss with Fund management its policies regarding risk assessment and risk management as such matters relate to the Fund’s financial reporting and controls; and (8) resolve any disagreements between Fund management and the independent auditors regarding financial reporting. The Board has adopted a written charter for the Audit Committee. During the Trust’s fiscal year ended December 31, 2012, the Audit Committee met four times.

The members of the Governance and Nominating Committee (the “Governance Committee”) are Dr. Matina S. Horner (Chair), Herbert I. London, Cynthia A. Montgomery, Robert C. Robb, Jr. and Toby Rosenblatt, all of whom are Independent Trustees. The principal responsibilities of the Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the Trust and recommend Independent Trustee nominees for election by shareholders or appointment by the Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board (other than the Audit Committee); (4) review and make recommendations regarding Independent Trustee compensation; and (5) monitor corporate governance matters and develop appropriate recommendations to the Board. The Governance Committee may consider nominations for the office of Trustee made by Fund shareholders as it deems appropriate. Fund shareholders who wish to recommend a nominee should send nominations to the Secretary of the Trust that include biographical information and set forth the qualifications of the proposed nominee. The Board has adopted a written charter for the Governance Committee. During the Trust’s fiscal year ended December 31, 2012, the Governance Committee met six times.

oversee the annual performance review of, and make certain recommendations regarding the Trust’s Chief Compliance Officer. The Board has adopted a written charter for the Compliance Committee. During the Trust’s fiscal year ended December 31, 2012, the Compliance Committee met eight times.

The members of the Performance Oversight and Contract Committee (the “Performance Oversight Committee”) are David O. Beim (Chair), Ronald W. Forbes, Ian A. MacKinnon, Toby Rosenblatt and Frederick W. Winter all of whom are Independent Trustees. The Performance Oversight Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee each Fund’s investment performance relative to its agreed-upon performance objectives and to assist the Independent Trustees in their consideration of investment advisory agreements. The Performance Oversight Committee’s responsibilities include, without limitation, to (1) review each Fund’s investment objectives, policies and practices and each Fund’s investment performance; (2) review information on appropriate benchmarks and competitive universes and unusual or exceptional investment matters; (3) review personnel and resources devoted to management of each Fund and evaluate the nature and quality of information furnished to the Performance Oversight Committee; (4) recommend any required action regarding change in fundamental and non-fundamental investment policies and restrictions, Fund mergers or liquidations; (5) request and review information on the nature, extent and quality of services provided to the shareholders; and (6) make recommendations to the Board concerning the approval or renewal of investment advisory agreements. The Board has adopted a written charter for the Performance Oversight Committee. During the Trust’s fiscal year ended December 31, 2012, the Performance Oversight Committee met five times.

The members of the Executive Committee (the “Executive Committee”) are Ronald W. Forbes and Rodney D. Johnson, both of whom are Independent Trustees, and Paul L. Audet, who serves as an interested Trustee. The principal responsibilities of the Executive Committee are to (1) act on routine matters between meetings of the Board; (2) act on such matters as may require urgent action between meetings of the Board; and (3) exercise such other authority as may from time to time be delegated to the Executive Committee by the Board. The Board has adopted a written charter for the Executive Committee. During the Trust’s fiscal year ended December 31, 2012, the Executive Committee of certain funds in the Equity-Liquidity Complex held two formal meetings. The Executive Committees met informally numerous times throughout the fiscal year.

The table below discusses some of the experiences, qualifications and skills of each of the Trustees that support the conclusion that each Trustee should serve (or continue to serve) on the Board.


Trustees		Experience, Qualifications and Skills

Independent Trustees

David O. Beim		David O. Beim has served for approximately 14 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. Mr. Beim has served as a professor of finance and economics at the Columbia University Graduate School of Business since 1991 and has taught courses on corporate finance, international banking and emerging financial markets. The Board benefits from the perspective and background gained by his almost 20 years of academic experience. He has published numerous articles and books on a range of topics, including, among others, banking and finance. In addition, Mr. Beim spent 25 years in investment banking, including starting and running the investment banking business at Bankers Trust Company.

Ronald W. Forbes		Ronald W. Forbes has served for more than 30 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. This length of service provides Mr. Forbes with direct knowledge of the operation of the Funds and the business and regulatory issues facing the Funds. He currently serves as professor emeritus at the School of Business at the State University of New York at Albany, and has served as a professor of finance thereof since 1989. Mr. Forbes’ experience as a professor of finance provides valuable background for his service on the boards. Mr. Forbes has also served as a member of the task force on municipal securities markets for Twentieth Century Fund.

Dr. Matina S. Horner		Dr. Matina S. Horner has served for over eight years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from her service as executive vice president of Teachers Insurance and Annuity Association and College Retirement Equities Fund. This experience provides Dr. Horner with management and corporate governance experience. In addition, Dr. Horner served as a professor in the Department of Psychology at Harvard University and served as president of Radcliffe College for 17 years. Dr. Horner also served on various public, private and non-profit boards.

Rodney D. Johnson		Rodney D. Johnson has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 25 years of experience as a financial advisor covering a range of engagements, which has broadened his knowledge of and experience with the investment management business. Prior to founding Fairmount Capital Advisors, Inc., Mr. Johnson served as Chief Financial Officer of Temple University for four years. He served as Director of Finance and Managing Director, in addition to a variety of other roles, for the City of Philadelphia, and has extensive experience in municipal finance. Mr. Johnson was also a tenured associate professor of finance at Temple University and a research economist with the Federal Reserve Bank of Philadelphia.

Herbert I. London		Herbert I. London has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. Dr. London’s experience as president of the Hudson Institute, a world renowned think tank in Washington D.C., since 1997; and in various positions at New York University provide both background and perspective on financial, economic and global issues, which enhance his service on the Board. He has authored several books and numerous articles, which have appeared in major newspapers and journals throughout the United States.

Ian A. MacKinnon		Ian A. MacKinnon recently joined as a member of the boards of the funds in the Equity-Liquidity Complex. Mr. MacKinnon spent over 25 years in fixed income investing. He served over 20 years as a portfolio manager at The Vanguard Group and was managing director and head of the Vanguard Fixed Income Group. The Board benefits from the perspective and experiences he has gained over 25 years in portfolio management and his expertise in the fixed income markets. Mr. MacKinnon has also served as a board member of the Municipal Securities Rulemaking Board.

Cynthia A. Montgomery		Cynthia A. Montgomery has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. The Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at Harvard Business School where she taught courses on corporate strategy and corporate governance. Ms. Montgomery also has business management and corporate governance experience through her service on the corporate boards of a variety of public companies. She has also authored numerous articles and books on these topics.

Joseph P. Platt		Joseph P. Platt has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Platt currently serves as general partner at Thorn Partners, LP, a private investment company. Prior to his joining Thorn Partners, LP, he was an owner, director and executive vice president with Johnson and Higgins, an insurance broker and employee benefits consultant. He has over 25 years experience in the areas of insurance, compensation and benefits. Mr. Platt also serves on the boards of public, private and non-profit companies.

Robert C. Robb, Jr.		Robert C. Robb, Jr. has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Robb has over 30 years of experience in management consulting and has worked with many companies and business associations located throughout the United States. Mr. Robb brings to the Board a wealth of practical business experience across a range of industries.


Trustees		Experience, Qualifications and Skills

Toby Rosenblatt		Toby Rosenblatt has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has served as president and general partner of Founders Investments, Ltd., a private investment limited partnership, since 1999, providing him with relevant experience with the issues faced by investment management firms and their clients. Mr. Rosenblatt has been active in the civic arena and has served as a trustee of a number of community and educational organizations for over 30 years.

Kenneth L. Urish		Kenneth L. Urish has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 30 years of experience in public accounting. Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable SEC rules.

Frederick W. Winter		Frederick W. Winter has served for over 13 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from Mr. Winter’s years of academic experience, having served as a professor and dean emeritus of the Joseph M. Katz Graduate School of Business at the University of Pittsburgh since 2005, and dean thereof from 1997 to 2005. He is widely regarded as a specialist in marketing strategy, marketing management, business-to-business marketing and services marketing. He has also served as a consultant to more than 50 different firms.

Interested Trustees

Paul L. Audet		Paul L. Audet has a wealth of experience in the investment management industry, including more than 13 years with BlackRock and over 30 years in finance and asset management. His expertise in finance is demonstrated by his positions as Chief Financial Officer of BlackRock and head of BlackRock’s Global Cash Management business. Mr. Audet currently is a member of BlackRock’s Global Operating and Corporate Risk Management Committees, the BlackRock Alternative Investors Executive Committee and the Investment Committee for the Private Equity Fund of Funds. Prior to joining BlackRock, Mr. Audet was the Senior Vice President of Finance at PNC Bank Corp. and Chief Financial Officer of the investment management and mutual fund processing businesses and Head of PNC’s Mergers and Acquisitions unit.

Henry Gabbay		Henry Gabbay’s many years of experience in finance provide the Board with a wealth of practical business knowledge and leadership. In particular, Mr. Gabbay’s experience as a Consultant for and Managing Director of BlackRock, Inc., Chief Administrative Officer of BlackRock and President of BlackRock Funds provides the Funds with greater insight into the analysis and evaluation of both their existing investment portfolios and potential future investments as well as enhanced oversight of its investment decisions and investment valuation processes. In addition, Mr. Gabbay’s former positions as Chief Administrative Officer of BlackRock and as Treasurer of certain closed-end funds in the BlackRock Fund Complexes provide the Board with direct knowledge of the operations of the Funds and their investment adviser. Mr. Gabbay’s previous service on and long-standing relationship with the Board also provides him with a specific understanding of the Funds, their operations, and the business and regulatory issues facing the Funds.


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Independent Trustees ¹

David O. Beim ³ 55 East 52 ^nd Street New York, NY 10055 1940	Trustee	2009 to present	Professor of Professional Practice at the Columbia University Graduate School of Business since 1991; Trustee, Phillips Exeter Academy from 2002 to 2012; Chairman, Wave Hill Inc. (public garden and cultural center) from 1990 to 2006.	33 RICs consisting of 107 Portfolios	None

Ronald W. Forbes ⁴ 55 East 52 ^nd Street New York, NY 10055 1940	Trustee	2009 to present	Professor Emeritus of Finance, School of Business, State University of New York at Albany since 2000.	33 RICs consisting of 107 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships Held During Past Five Years

Dr. Matina S. Horner ⁵ 55 East 52 ^nd Street New York, NY 10055 1939	Trustee	2009 to present	Executive Vice President of Teachers Insurance and Annuity Association and College Retirement Equities Fund from 1989 to 2003.	33 RICs consisting of 107 Portfolios	NSTAR (electric and gas utility)

Rodney D. Johnson ⁴ 55 East 52 ^nd Street New York, NY 10055 1941	Trustee	2009 to present	President, Fairmont Capital Advisors, Inc. since 1987; Member of Archdiocesan Investment Committee of the Archdiocese of Philadelphia from 2004 to 2012; Director, The Committee of Seventy (civic) from 2006 to 2012; Director, Fox Chase Cancer Center from 2004 to 2011.	33 RICs consisting of 107 Portfolios	None

Herbert I. London 55 East 52 ^nd Street New York, NY 10055 1939	Trustee	2009 to present	Professor Emeritus, New York University since 2005; John M. Olin Professor of Humanities, New York University from 1993 to 2005 and Professor thereof from 1980 to 2005; President Emeritus, Hudson Institute (policy research organization) from 2011 to 2012, President thereof from 1997 to 2011 and Trustee from 1980 to 2012; Chairman of the Board of Trustees for Grantham University since 2006; Director, InnoCentive, Inc. (global internet service) since 2005; Director, Cerego, LLC (educational software) since 2005; Director, Cybersettle (online adjudication) since 2009; Director, AIMS Worldwide, Inc. from 2007 to 2012.	33 RICs consisting of 107 Portfolios	None

Ian A. MacKinnon 55 East 52 ^nd Street New York, NY 10055 1948	Trustee	2012 to present	Director, Kennett Capital, Inc. (investments) since 2006; Director, Free Library of Philadelphia from 1999 to 2008.	33 RICs consisting of 107 Portfolios	None

Cynthia A. Montgomery 55 East 52 ^nd Street New York, NY 10055 1952	Trustee	2009 to present	Professor, Harvard Business School since 1989; Director, McLean Hospital from 2005 to 2012; Director, Harvard Business School Publishing from 2005 to 2010.	33 RICs consisting of 107 Portfolios	Newell Rubbermaid, Inc. (manufacturing)

Joseph P. Platt ⁶ 55 East 52 ^nd Street New York, NY 10055 1947	Trustee	2009 to present	Director, Jones and Brown (Canadian insurance broker) since 1998; Director, The West Penn Allegheny Health System (a not-for-profit health system) since 2008; General Partner, Thorn Partner, LP (private investment) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Partner, Amarna Corporation, LLC (private investment company) from 2002 to 2008.	33 RICs consisting of 107 Portfolios	Greenlight Capital Re, Ltd. (reinsurance company)

Robert C. Robb, Jr. 55 East 52 ^nd Street New York, NY 10055 1945	Trustee	2009 to present	Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981.	33 RICs consisting of 107 Portfolios	None

Toby Rosenblatt 55 East 52 ^nd Street New York, NY 10055 1938	Trustee	2009 to present	President, Founders Investments Ltd. (private investments) since 1999; Director, Forward Management, LLC since 2007; Director, College Access Foundation of California (philanthropic foundation) since 2009; Director, A.P. Pharma, Inc. (pharmaceuticals) from 1983 to 2011; Director, the James Irvine Foundation (philanthropic foundation) from 1998 to 2008.	33 RICs consisting of 107 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ²	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Kenneth L. Urish ⁷ 55 East 52 ^nd Street New York, NY 10055 1951	Trustee	2009 to present	Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants since 2010 and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since 2001; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007.	33 RICs consisting of 107 Portfolios	None

Frederick W. Winter 55 East 52 ^nd Street New York, NY 10055 1945	Trustee	2009 to present	Professor and Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh since 2005 and Dean thereof from 1997 to 2005; Director, Alkon Corporation (pneumatics) since 1992; Director, Tippman Sports (recreation) since 2005; Director, Indotronix International (IT services) from 2004 to 2008.	33 RICs consisting of 107 Portfolios	None

Interested Trustees ^1,8

Paul L. Audet 55 East 52 ^nd Street New York, NY 10055 1953	Trustee	2011 to present	Senior Managing Director of BlackRock and Head of U.S. Mutual Funds since 2011; Chair of the U.S. Mutual Funds Committee reporting to the Global Executive Committee since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees and of the BlackRock Alternative Investors Executive Committee and Investment Committee for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005.	155 RICs consisting of 280 Portfolios	None

Henry Gabbay 55 East 52 ^nd Street New York, NY 10055 1947	Trustee	2009 to present	Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007 and Treasurer of certain closed- end funds in the BlackRock fund complex from 1989 to 2006.	155 RICs consisting of 280 Portfolios	None

Chair of the Performance Oversight Committee.

⁴

Co-Chair of the Board.

⁵

Chair of the Governance Committee.

⁶

Chair of the Compliance Committee.

⁷

Chair of the Audit Committee.

⁸


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ¹	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

John M. Perlowski 55 East 52 ^nd Street New York, NY 10055 1964	President and Chief Executive Officer	2010 to present	Managing Director of BlackRock, Inc. since 2009; Global Head of BlackRock Fund Administration since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.	155 RICs consisting of 280 Portfolios	None

Richard Hoerner, CFA 55 East 52 ^nd Street New York, NY 10055 1958	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2000; Head of the Global Cash Group since 2013; Co-head of the Global Cash and Securities Lending Group from 2010 to 2013; Member of the Cash Management Group Executive Committee since 2005.	24 RICs consisting of 94 Portfolios	None

Brendan Kyne 55 East 52 ^nd Street New York, NY 10055 1977	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009 and Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.	155 RICs consisting of 280 Portfolios	None

Christopher Stavrakos, CFA 55 East 52 ^nd Street New York, NY 10055 1959	Vice President	2009 to present	Managing Director of BlackRock, Inc. since 2006; Co-head of BlackRock’s Cash Management Portfolio Management Group since 2006; Senior Vice President, CIO, and Director of Liability Management for the Securities Lending Group at Mellon Bank from 1999 to 2006.	24 RICs consisting of 94 Portfolios	None

Neal J. Andrews 55 East 52 ^nd Street New York, NY 10055 1966	Chief Financial Officer and Assistant Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.	155 RICs consisting of 280 Portfolios	None

Jay M. Fife 55 East 52 ^nd Street New York, NY 10055 1970	Treasurer	2009 to present	Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.	155 RICs consisting of 280 Portfolios	None


Name, Address and Year of Birth	Position(s) Held with the Trust	Length of Time Served ¹	Principal Occupation(s) During Past Five Years	Number of BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Investment Company Directorships

Brian P. Kindelan 55 East 52 ^nd Street New York, NY 10055 1959	Chief Compliance Officer and Anti-Money Laundering Officer	2009 to present	Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005.	155 RICs consisting of 280 Portfolios	None

Benjamin Archibald 55 East 52 ^nd Street New York, NY 10055 1975	Secretary	2012 to present	Director of BlackRock, Inc. since 2010; Assistant Secretary to the Trust from 2010 to 2012; General Counsel and Chief Operating Officer of Uhuru Capital Management from 2009 to 2010; Executive Director and Counsel of Goldman Sachs Asset Management from 2005 to 2009.	62 RICs consisting of 191 Portfolios	None

Officers of the Trust serve at the pleasure of the Board of Trustees.

Dollar Range of Equity Securities

Trustees

BlackRock
Cash Funds:
Government

BlackRock
Cash
Funds:
Institutional

BlackRock
Cash
Funds:
Prime

BlackRock
Cash Funds:
Treasury

Aggregate Dollar
Range of
Securities in the
Supervised Funds

Interested Trustees:

Paul L. Audet

None

Over $100,000

Henry Gabbay

None

Over $100,000

Independent Trustees:

David O. Beim

None

Over $100,000

Ronald W. Forbes

None

Over $100,000

Dr. Matina S. Horner

None

Over $100,000

Rodney D. Johnson

None

Over $100,000

Herbert I. London

None

$50,001-$100,000

Ian A. MacKinnon

None

Over $100,000

Cynthia A. Montgomery

None

Over $100,000

Joseph P. Platt

None

Over $100,000

Robert C. Robb, Jr.

None

Over $100,000

Toby Rosenblatt

None

Over $100,000

Kenneth L. Urish

None

Over $100,000

Frederick W. Winter

None

Over $100,000

Funds in the Equity-Liquidity Complex, including the Trust and MIP, and a $5,000 Board meeting fee to be paid for each in-person Board meeting attended (a $2,500 Board meeting fee for telephonic attendance at regular Board meetings), for up to five Board meetings held in a calendar year (compensation for meetings in excess of this number to be determined on a case-by-case basis), together with out-of-pocket expenses in accordance with a Board policy on travel and other business expenses relating to attendance at meetings. Each Independent Trustee receives $10,000 per year for each standing Committee on which he or she serves for up to two standing Committee assignments but is not paid this amount for serving on a Committee which he or she chairs. The Co-Chairs of the Boards of Trustees are each paid an additional annual retainer of $60,000. The Chair of the Audit Committee is paid an additional annual retainer of $40,000 and the Chairs of the Compliance Committees, Governance Committees and Performance Oversight Committees are each paid an additional annual retainer of $30,000.

The following table sets forth the compensation earned by Trustees from the Master Portfolios for the fiscal year ended December 31, 2012 and the aggregate compensation paid to them by all BlackRock-advised Funds for the calendar year ended December 31, 2012. The Trustees received no additional compensation from the Trust with respect to the Funds.


Name	Money Market Master Portfolio	Prime Money Market Master Portfolio	Government Money Market Master Portfolio	Treasury Money Market Master Portfolio	Aggregate Compensation from the Master Portfolios and Other BlackRock- Advised Funds ¹

Independent Trustees:

David O. Beim ²	$28,958	$9,532	$250	$2,025	$300,000

Ronald W. Forbes ³	$31,741	$10,453	$251	$2,205	$326,250

Dr. Matina S. Horner ⁴	$28,958	$9,532	$250	$2,025	$300,000

Rodney D. Johnson ³	$31,741	$10,453	$251	$2,205	$326,250

Herbert I. London	$26,348	$8,687	$249	$1,863	$275,000

Ian A. MacKinnon ⁵	$17,769	$5,613	$151	$1,297	$172,967

Cynthia A. Montgomery	$26,348	$8,687	$249	$1,863	$275,000

Joseph P. Platt ⁶	$29,881	$9,828	$202	$2,046	$313,750

Robert C. Robb, Jr.	$26,348	$8,687	$249	$1,863	$275,000

Toby Rosenblatt ⁷	$28,935	$9,509	$226	$2,002	$297,500

Kenneth L. Urish ⁸	$28,958	$9,532	$250	$2,025	$310,000

Frederick W. Winter	$26,348	$8,687	$249	$1,863	$275,000


Name	Money Market Master Portfolio	Prime Money Market Master Portfolio	Government Money Market Master Portfolio	Treasury Money Market Master Portfolio	Aggregate Compensation from the Master Portfolios and Other BlackRock- Advised Funds ¹

Interested Trustees:

Paul L. Audet	None	None	None	None	None

Henry Gabbay	$20,267	$7,055	$187	$1,508	$641,250

For the number of BlackRock-advised RICs and Portfolios from which each Trustee receives compensation, see the Biographical Information chart beginning on page 21.

Chair of the Performance Oversight Committee.

Co-Chair of the Board.

⁴

Chair of the Governance Committee.

⁵

Mr. MacKinnon was appointed to serve as a Trustee of the Trust and as a director or trustee of all of the other funds in the Equity-Liquidity Complex effective May 14, 2012.

⁶

Chair of the Compliance Committee.

⁷

Mr. Rosenblatt served as Vice Chair of the Performance Oversight Committee for the year ended December 31, 2012 for which he was paid an annual retainer of $25,000.

⁸

Chair of the Audit Committee.

Codes of Ethics. The Trust and BFA and BlackRock Investments, LLC, the Funds’ distributor (the “Distributor”) have adopted Codes of Ethics pursuant to Rule 17j-1 under the 1940 Act. The Codes of Ethics permit personnel subject to the Codes of Ethics to invest in securities, subject to certain limitations, including securities that may be purchased or held by the Funds. The Codes of Ethics are on public file with, and are available from, the SEC.

Proxy Voting Policies of the Master Portfolios. The Board of Trustees of MIP has delegated the voting of proxies for each Master Portfolio’s securities to BFA pursuant to MIP’s proxy voting guidelines. Under these guidelines, BFA will vote proxies related to the securities held by each Master Portfolio in the best interests of the Master Portfolio and its stockholders. From time to time, a vote may present a conflict between the interests of the Master Portfolio’s stockholders, on the one hand, and those of BFA, or any affiliated person of MIP or BFA, on the other. In such event, provided that BlackRock’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Committee”) is aware of the real or potential conflict or material non-routine matter and if the Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Committee may retain an independent fiduciary to advise the Committee on how to vote or to cast votes on behalf of BFA’s clients. If BFA determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Committee shall determine how to vote the proxy after consulting with BlackRock’s Portfolio Management Group and/or BlackRock’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of MIP’s Proxy Voting Policies is attached as Appendix A.

Shareholder Communication to the Board of Trustees. The Board of Trustees has established a process for shareholders to communicate with the Board of Trustees. Shareholders may contact the Board of Trustees by mail. Correspondence should be addressed to BlackRock Funds III Board of Trustees, c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. Shareholder communication to the Board of Trustees should include the following information: (a) the name and address of the shareholder; (b) the number of shares owned by the shareholder; (c) the Fund(s) of which the shareholder owns shares; and (d) if these shares are owned indirectly through a broker, financial intermediary or other record owner, the name of the broker, financial intermediary or other record owner. All correspondence received as set forth above shall be reviewed by the Secretary of the Trust and reported to the Board of Trustees.

Potential Conflicts of Interest. The PNC Financial Services Group, Inc. (“PNC”), has a significant economic interest in BlackRock, Inc., the parent of BFA, the Master Portfolios’ investment adviser. PNC is considered to be an affiliate of BlackRock, Inc., under the 1940 Act. Certain activities of BFA, BlackRock Advisors, LLC, BlackRock, Inc. and their affiliates (collectively, “BlackRock”) and PNC and its affiliates (collectively, “PNC” and together with BlackRock, “Affiliates”) with respect to the Funds and/or other accounts managed by BlackRock or PNC, may give rise to actual or perceived conflicts of interest such as those described below.

BlackRock and its Affiliates and their clients may pursue or enforce rights with respect to an issuer in which a Fund has invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability, liquidity and terms of the Fund’s investments may be negatively impacted by the activities of BlackRock or its Affiliates or their clients, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.

One or more Affiliates may act as broker, dealer, agent, lender or adviser or in other commercial capacities for a Fund. It is anticipated that the commissions, mark-ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions charged by an Affiliate will be in its view commercially reasonable, although each Affiliate, including its sales personnel, will have an interest in obtaining fees and other amounts that are favorable to the Affiliate and such sales personnel.

paid by client commissions that also will be used to pay for the execution, clearing, and settlement services provided by the broker-dealer and will not be paid by BlackRock.

profitability relating to services to and sales of the Funds or other products may be greater than remuneration and profitability relating to services to and sales of certain funds or other products that might be provided or offered. BlackRock and its Affiliates and their sales personnel may directly or indirectly receive a portion of the fees and commissions charged to the Funds or their shareholders. BlackRock and its advisory or other personnel may also benefit from increased amounts of assets under management. Fees and commissions may also be higher than for other products or services, and the remuneration and profitability to BlackRock or its Affiliates and such personnel resulting from transactions on behalf of or management of the Funds may be greater than the remuneration and profitability resulting from other funds or products.

BlackRock and its Affiliates and their directors, officers and employees, may buy and sell securities or other investments for their own accounts, and may have conflicts of interest with respect to investments made on behalf of a Fund. As a result of differing trading and investment strategies or constraints, positions may be taken by directors, officers, employees and Affiliates of BlackRock that are the same, different from or made at different times than positions taken for a Fund. To lessen the possibility that a Fund will be adversely affected by this personal trading, the Trust and BFA each have adopted a Code of Ethics in compliance with Section 17(j) of the 1940 Act that restricts securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information about obtaining documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. Each Code of Ethics is also available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by e-mail at publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, DC 20549-1520.

activities of a Fund may be restricted because of regulatory requirements applicable to BlackRock or its Affiliates and/or BlackRock’s internal policies designed to comply with, limit the applicability of, or otherwise relate to such requirements. A client not advised by BlackRock would not be subject to some of those considerations. There may be periods when BlackRock may not initiate or recommend certain types of transactions, or may otherwise restrict or limit their advice in certain securities or instruments issued by or related to companies for which an Affiliate is performing investment banking, market making, advisory or other services or has proprietary positions. For example, when an Affiliate is engaged in an underwriting or other distribution of securities of, or advisory services for, a company, the Funds may be prohibited from or limited in purchasing or selling securities of that company. In addition, when BlackRock is engaged to provide advisory or risk management services for a company, BlackRock may be prohibited from or limited in purchasing or selling securities of that company on behalf of a Fund, particularly where such services result in BlackRock obtaining material non-public information about the company. Similar situations could arise if personnel of BlackRock or its Affiliates serve as directors of companies the securities of which the Funds wish to purchase or sell. However, if permitted by applicable law, and where consistent with BlackRock’s policies and procedures (including the necessary implementation of appropriate information barriers), the Funds may purchase securities or instruments that are issued by such companies, are the subject of an underwriting, distribution, or advisory assignment by an Affiliate or are the subject of an advisory or risk management assignment by BlackRock, or where personnel of BlackRock or its Affiliates are directors or officers of the issuer.

The custody arrangement described in “Investment Adviser and Other Service Providers” may lead to potential conflicts of interest with BFA where BFA has agreed to waive fees and/or reimburse ordinary operating expenses in order to cap expenses of the Funds. This is because the custody arrangements with the Funds’ custodian may have the effect of reducing custody fees when the Funds leave cash balances uninvested. When a Fund’s actual operating expense ratio exceeds a stated cap, a reduction in custody fees reduces the amount of waivers and/or reimbursements BFA would be required to make to the Fund. This could be viewed as having the potential to provide BFA an incentive to keep high positive cash balances for Funds with expense caps in order to offset fund custody fees that BFA might otherwise reimburse. However, portfolio managers of BFA do not intentionally keep uninvested balances high, but rather make investment decisions that they anticipate will be beneficial to fund performance.

Present and future activities of BlackRock and its Affiliates, including BlackRock Advisors, LLC, in addition to those described in this section, may give rise to additional conflicts of interest.

Control Persons and Principal Holders of Securities

As of March 30, 2013, the shareholders below were known by the Trust to own 5% or more of the outstanding shares of the specified Fund, in the listed capacity.


Name of Fund	Name and Address of Shareholder	Percentage of Share Class		Nature of Ownership

BlackRock Cash Funds: Prime

SL Agency Shares	Investors Bank and Trust as Custodian FBO iShares Lehman Aggregate Bond Fund ATTN Maureen Panagrossi or Shawn Clark Mail Code ETF068 200 Clarendon Street Boston, MA 02116		9%	Record

	IBT as Custodian iShares Lehman MBS Fixed Rate Bond Fund ATTN Shawn Clark 200 Clarendon Street Boston, MA 02116		27%	Record

	BGI NA on behalf of various clients 400 Howard Street San Francisco, CA 94105		60%	Record

BlackRock Cash Funds: Institutional

SL Agency Shares	BGI NA on behalf of various clients 400 Howard Street San Francisco, CA 94105		96%	Record

BlackRock Cash Funds: Treasury

SL Agency Shares	Investors Bank & Trust Cust FBO iShares S&P 500 Sweep Account ATTN Timothy Downey/Varisara Ratanabala Mail Code ETF068 200 Clarendon Street Boston, MA 02116		7%	Record

	Investors Bank and Trust as Custodian iShares Lehman TIPS Bond Fund ATTN Shawn Clark 200 Clarendon Street Boston, MA 02116		8%	Record

	IBT as Custodian iShares Lehman 1-3 Year Credit Bond Fund ATTN Shawn Clark 200 Clarendon Street Boston, MA 02116		11%	Record


Name of Fund	Name and Address of Shareholder	Percentage of Share Class		Nature of Ownership

	Investors Bank and Trust as Custodian iShares iBoxx $ High Yield Corporate Bond Fund 200 Clarendon Street Boston, MA 02116		13%	Record

	Investors Bank and Trust as Custodian for iShares Goldman Investop Bond Fund ATTN Shawn Clark 200 Clarendon Street Boston, MA 02116		14%	Record

Investment Adviser and Other Service Providers

BFA is an indirect wholly-owned subsidiary of BlackRock, Inc.

The Advisory Contract is subject to annual approval by (i) MIP’s Board of Trustees or (ii) the vote of a majority (as defined in the 1940 Act) of the outstanding voting interests of such Master Portfolio, provided that in either event the continuance also is approved by a majority of MIP’s Independent Trustees, by a vote cast in person at a meeting called for the purpose of voting on such approval. The Advisory Contract is terminable without penalty, on 60 days’ written notice, by either party. The Advisory Contract will terminate automatically, as to the relevant Master Portfolio, in the event of its assignment (as defined in the 1940 Act).

For the fiscal years shown below, the related Master Portfolio of each Fund paid to BFA the following management fees, net of waivers and/or offsetting credits:


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	7,846,621	$	7,420,005	$	8,284,265

Money Market Master Portfolio	$	12,963,015	$	19,011,676	$	25,231,520

Government Money Market Master Portfolio	$	22,357	$	53,794	$	(12,489)

Treasury Money Market Master Portfolio	$	2,476,460	$	959,491	$	1,261,911

For the fiscal years shown below, BFA waived the following management fees with respect to the Master Portfolios in which the Funds invest:


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	3,439,471	$	3,262,621	$	3,623,498

Money Market Master Portfolio	$	5,668,679	$	8,338,684	$	11,036,001

Government Money Market Master Portfolio	$	136,729	$	35,880	$	2,872

Treasury Money Market Master Portfolio	$	1,927,451	$	581,541	$	575,143


	Fiscal Year Ended December 31,
Master Portfolio	2010		2011		2012

Prime Money Market Master Portfolio	$	178,811	$	192,777	$	170,403

Money Market Master Portfolio	$	263,903	$	445,252	$	518,726

Government Money Market Master Portfolio	$	21,997	$	22,902	$	18,866

Treasury Money Market Master Portfolio	$	82,521	$	49,146	$	50,177

Administrator. Effective July 1, 2012, the Trust has engaged BAL to provide certain administration services to the Funds. Pursuant to an Administration Agreement with the Trust, BAL and its affiliates provide as administration services, among other things: supervision of the administrative operation of the Trust and the Funds, provision of management reporting and treasury administration services, financial reporting, legal and tax services, and preparation of proxy statements and shareholder reports for the Funds. BAL and its affiliates also furnish office space and certain facilities required for conducting the business of the Trust together with all other administrative services that are not being furnished by BFA. BAL and its affiliates also pay the compensation of the Trust’s Trustees who are not Independent Trustees and of officers and employees who are affiliated with the Trust. For providing such services, BAL is entitled to a monthly fee at an annual rate of 0.02% of each Fund’s average daily net assets attributable to SL Agency Shares. BAL has contracted with State Street Bank and Trust Company (“State Street”) to provide certain sub-administration services to the Funds. BAL, not the Funds, is responsible for providing compensation to State Street for such services.

For the fiscal years shown below, the Funds paid the following administration fees to BAL or BTC, net of waivers and/or offsetting credits.


	Fiscal Year Ended December 31,
Fund	2010		2011		2012

BlackRock Cash Funds: Prime	$	4,657,228	$	4,793,298	$	5,234,976

BlackRock Cash Funds: Institutional	$	3,957,385	$	5,798,803	$	7,644,381

BlackRock Cash Funds: Government	$	56,044	$	8,823	$	(5,165)

BlackRock Cash Funds: Treasury	$	927,607	$	111,897	$	236,353

For the fiscal years shown below, BAL or BTC waived the following administration fees with respect to the Funds:


	Fiscal Year Ended December 31,
Fund	2010		2011		2012

BlackRock Cash Funds: Prime	$	92,765	$	66,973	$	38,887

BlackRock Cash Funds: Institutional	$	25,031	$	21,513	$	12,131

BlackRock Cash Funds: Government	$	39,200	$	20,051	$	8,464

BlackRock Cash Funds: Treasury	$	140,899	$	142,750	$	82,514

For the fiscal years shown below, BAL or BTC provided an offsetting credit, in the amounts shown, against administration fees paid with respect to the Funds:


	Fiscal Year Ended December 31,
Fund	2010	2011	2012

BlackRock Cash Funds: Prime	$31,970	$15,816	$13,967

BlackRock Cash Funds: Institutional	$45,423	$15,816	$13,967

BlackRock Cash Funds: Government	$12,067	$15,816	$13,957

BlackRock Cash Funds: Treasury	$15,814	$15,816	$13,967

any unused credits at the end of a given month may be carried forward to a subsequent month. Any such credits unused by the end of a Master Portfolio’s fiscal year will not expire. Net debits at the end of a given month are added to the applicable Fund’s custody bill and paid by such Fund.

Transfer and Dividend Disbursing Agent. State Street has also been retained to act as the transfer and dividend disbursing agent for the Funds and the Master Portfolios. For its services as transfer and dividend disbursing agent to the Funds and the Master Portfolios, State Street is paid fees based on the Funds’ and the Master Portfolios’ net assets. State Street is entitled to be reimbursed for out-of-pocket expenses or advances incurred by it in performing its obligations under the Transfer Agency Agreement. BAL has agreed to pay these fees and expenses pursuant to its Administration Agreement with the Trust. In addition, the Transfer Agency Agreement contemplates that State Street will be reimbursed for other expenses incurred by it at the request or with the written consent of the Funds, including, without limitation, any equipment or supplies that the Trust specifically orders or requires State Street to order.

Determination of Net Asset Value

outstanding shares without monetary consideration, and utilizing a net asset value per share as determined by using available market quotations.

Purchase, Redemption and Pricing of Shares

Terms of Purchase and Redemption. The Funds are generally open Monday through Friday and are closed on weekends and are generally closed on all other days that the Fedwire Funds Service (the “Fedwire”) is closed or the primary markets for the Master Portfolios’ portfolio securities ( i.e. , the bond markets) are closed. The holidays on which both the Fedwire and the primary markets for the Master Portfolios’ portfolio securities are closed currently are: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. The Funds are also closed on Good Friday. On any day that the principal bond markets close early (as recommended by The Securities Industry Financial Markets Association (“SIFMA”)) or the Federal Reserve Bank of Philadelphia or the NYSE closes early ⁽¹⁾ , a Fund may advance the time on that day by which a purchase order must be placed so that it will be effected and begin to earn dividends that day. Each Fund reserves the right to change the amount of the minimum investment and subsequent purchases in the Fund. An investor’s investment in the Funds and/or other investment vehicles managed or maintained by BFA or its affiliates may be aggregated when determining whether an investor meets a minimum investment amount. The minimum initial investment amounts for the classes of the Funds may be reduced or waived by BFA. On any day a Fund closes early, purchase and redemption orders received after the Funds’ closing time will be executed on the next business day. In addition, the Funds reserve the right to advance the time by which purchase and redemption orders must be received to be executed on the same business day as permitted by the SEC and applicable law.

In-Kind Purchases. Payment for shares of the Funds may, at the discretion of BFA, be made in the form of securities that are permissible investments for the Funds and must meet the investment objectives, policies and limitations of the Funds as described in their Prospectus. In connection with an in-kind securities payment, the Funds may require, among other things, that the securities (i) be valued on the day of purchase in accordance with the pricing methods used by the Funds or the Master Portfolios; (ii) are accompanied by satisfactory assurance that the Funds will have good and marketable title to such securities received by them; (iii) are not subject to any restrictions upon resale by the Funds; (iv) be in proper form for transfer to the Funds; and (v) are accompanied by adequate information concerning the basis and other tax matters relating to the securities. All dividends, interest, subscription or other rights pertaining to such securities shall become the property of the Funds engaged in the in-kind purchase transaction and must be delivered to such Fund or Funds by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for investment and not for immediate resale. A Fund immediately will transfer to its Master Portfolio any and all securities received by it in connection with an in-kind purchase transaction, in exchange for interests in such Master Portfolio. Shares purchased in exchange for securities generally cannot be redeemed until the transfer has settled.

determine the net asset value of shares of the Fund; (4) for any period during which the Securities and Exchange Commission (“SEC”) has, by rule or regulation, deemed that (a) trading shall be restricted or (b) an

⁽¹⁾

SIFMA currently recommends an early close for the bond markets on the following dates: May 24, November 29, December 24 and December 30, 2013 and April 17, 2014. The NYSE will close early on July 3, November 29 and December 24, 2013.

emergency exists; (5) for any period that the SEC may by order permit for your protection; or (6) for any period during which the Fund, as part of a necessary liquidation of the Fund, has properly postponed and/or suspended redemption of shares and payment in accordance with Federal securities laws as discussed below.

Declaration of Trust Provisions Regarding Redemptions at Option of Trust. As provided in the Trust’s Declaration of Trust, the Trustees may require shareholders to redeem shares for any reason under terms set by the Trustees, including, but not limited to, the failure of shareholder to supply a taxpayer identification number if required to do so, or to have the minimum investment required, or to pay when due for the purchase of shares issued to such shareholder.

Portfolio Transactions

Since the Funds invest all of their assets in portfolios of MIP, set forth below is a description of the Master Portfolios’ policies governing portfolio securities transactions.

be held by a Master Portfolio in the form of depositary receipts, or other securities convertible into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in over-the-counter markets in the United States or Europe, as the case may be. American Depositary Receipts, like other securities traded in the United States, will be subject to negotiated commission rates. Because the shares of each Fund and interests of the Master Portfolios are redeemable on a daily basis in U.S. dollars, each Master Portfolio intends to manage its portfolio so as to give reasonable assurance that it will be able to obtain U.S. dollars to the extent necessary to meet anticipated redemptions. Under present conditions, it is not believed that these considerations will have a significant effect on a Master Portfolio’s portfolio strategies.


Master Portfolio	Regular Broker-Dealer or Parent	Debt(D)/Equity(E)	Amount

Money Market Master Portfolio	Natixis	D	$550,000,000

Money Market Master Portfolio	Credit Suisse AG	D	$384,000,000

Prime Money Market Master Portfolio	Svenska Handelsbanken	D	$425,000,000

Prime Money Market Master Portfolio	Natixis	D	$215,000,000

Distributions and Taxes

The following information supplements, and should be read in conjunction with, the section in each Prospectus entitled “Account Information — Taxes.” The Prospectus generally describes the U.S. federal income tax treatment of distributions by the Funds. This section of the SAI provides additional information concerning U.S. federal income taxes. It is based on the U.S. Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as of the date of this SAI and all of which are subject to change, including changes with retroactive effect. The following discussion does not address any state, local or foreign tax matters.

The Trust has not requested and will not request an advance ruling from the Internal Revenue Service (the “IRS”) as to the U.S. federal income tax matters described below. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. In addition, the foregoing discussion and the discussions in the Prospectus applicable to each shareholder address only some of the U.S. federal income tax considerations generally affecting investments in the Funds. Prospective shareholders are urged to consult with their own tax advisers and financial planners as to the particular U.S. federal tax consequences to them of an investment in the Funds, as well as the applicability and effect of any state, local or foreign laws, and the effect of possible changes in applicable tax laws.

Revenue Code. Pursuant to regulations that may be promulgated in the future, the IRS may limit qualifying income from foreign currency gains to the amount of such currency gains that are directly related to a regulated investment company’s principal business of investing in stock or securities. Each Fund must also diversify its holdings so that, at the end of each quarter of each taxable year: (i) at least 50% of the value of its assets consists of (A) cash and cash items (including receivables), U.S. government securities and securities of other regulated investment companies, and (B) other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer and (ii) not more than 25% of the value of the Fund’s total assets is invested in (A) the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer, (B) the securities (other than the securities of other regulated investment companies) of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (C) the securities of one or more qualified publicly-traded partnerships. The qualifying income and diversification requirements applicable to a Fund may limit the extent to which it can engage in transactions in options, futures contracts, forward contracts and swap agreements.

If, in any taxable year, a Fund fails to qualify as a regulated investment company under the Internal Revenue Code, not withstanding the availability of certain relief provisions, or fails to meet the distribution requirements described above, the Fund would be taxed in the same manner as an ordinary U.S. corporation without any deduction for distributions to shareholders, and all distributions from the Fund’s earnings and profits (including any distributions of net tax-exempt income and net capital gain) to its shareholders would also be taxable as ordinary income at the shareholder level. To qualify again to be taxed as a regulated investment company in a subsequent year, the Fund may be required to pay an interest charge and penalty to the IRS as well as distribute to its shareholders its earnings and profits attributable to non-regulated investment company years. In addition, if the Fund fails to qualify as a regulated investment company for a period greater than two taxable years, the Fund may be required to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if the Fund had been liquidated) or, alternatively, to be subject to taxation on such built-in gain recognized for a period of ten years, in order to qualify as a regulated investment company in a subsequent year.

ordinary income and net capital gain income from previous years that was not distributed or subject to tax during such years. Each Fund intends to distribute substantially all of its net income and gains, if any, by the end of each calendar year and, thus, expects not to be subject to the excise tax. However, no assurance can be given that a Fund will not be subject to the excise tax.

Capital Loss Carry-Forwards. For taxable years of a Fund beginning after December 22, 2010, a Fund is permitted to carry forward indefinitely a net capital loss to offset its capital gains, if any, and such loss retains its character as either short-term or long-term capital loss. For taxable years of a Fund beginning before December 23, 2010, a Fund is permitted to carry forward a net capital loss from any year to offset its capital gains, if any, realized during the eight years following the year of the loss, and such loss is treated as a short-term capital loss in the year to which it is carried. Net capital losses incurred in taxable years of a Fund beginning before December 23, 2010 may not be used to offset capital gains until all net capital losses incurred in taxable years of a Fund beginning after December 22, 2010 have been utilized. As a result, some net capital losses incurred in taxable years of a Fund beginning before December 23, 2010 may expire unutilized. If future capital gains are offset by carried-forward capital losses, such future capital gains are not subject to Fund-level U.S. federal income taxation, regardless of whether they are distributed to shareholders. Accordingly, the Funds do not expect to distribute any such capital gains. The Funds cannot carry back or carry forward any net operating losses. As a money market fund, each Fund does not expect to have material capital loss carry-forwards, but no assurance can be given to this effect.

Investment Through the Master Portfolios. The Funds seek to continue to qualify as regulated investment companies by investing their assets through the Master Portfolios. Each Master Portfolio is treated as a non-publicly traded partnership (or, in the event that a Fund is the sole investor in a Master Portfolio, as disregarded from the Fund) for U.S. federal income tax purposes rather than as a regulated investment company or a corporation under the Internal Revenue Code. Under the rules applicable to a non-publicly traded partnership (or disregarded entity), a proportionate share of any interest, dividends, gains and losses of a Master Portfolio will be deemed to have been realized by ( i.e. , “passed-through” to) its investors, including the corresponding Fund, regardless of whether any amounts are actually distributed by the Master Portfolio. Each investor in a Master Portfolio will be taxable on such share, as determined in accordance with the governing instruments of the particular Master Portfolio, the Internal Revenue Code and Treasury Regulations. Therefore, to the extent that a Master Portfolio were to accrue but not distribute any income or gains, the corresponding Fund would be deemed to have realized its proportionate share of such income or gains without receipt of any corresponding distribution. However, each of the Master Portfolios will seek to minimize recognition by its investors (such as the Funds) of income and gains without a corresponding distribution. Furthermore, each Master Portfolio’s assets, income and distributions will be managed in such a way that an investor in a Master Portfolio will be able to continue to qualify as a regulated investment company by investing its assets through the Master Portfolio.

have been received by the Fund. Cash to pay such distributions may be obtained from borrowing or from sales of securities held by a Fund which the Fund otherwise might have continued to hold.

Foreign exchange gains and losses realized by a Fund in connection with certain transactions involving foreign currency-denominated debt securities, certain options and futures contracts relating to foreign currency, foreign currency forward contracts, foreign currencies, or payables or receivables denominated in a foreign currency are subject to Section 988 of the Internal Revenue Code, which generally causes such gains and losses to be treated as ordinary income and losses and may affect the amount and timing of recognition of the Fund’s income. Under Treasury Regulations that may be promulgated in the future, any such transactions that are not directly related to a Fund’s principal business of investing in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may have to be limited in order to enable the Fund to satisfy the 90% income test described above. If the net foreign exchange loss for a year exceeds a Fund’s investment company taxable income (computed without regard to such loss), the resulting ordinary loss for such year will not be deductible by the Fund or its shareholders in future years.

earnings and profits will first be treated as a return of capital up to the amount of a shareholder’s tax basis in the shareholder’s Fund shares and any such amount in excess of that basis as capital gain from the sale of shares, as discussed below. A Fund may make distributions in excess of earnings and profits to a limited extent, from time to time.

investment income (which includes, but is not limited to, interest, dividends and net gain from investments) of U.S. individuals with income exceeding $200,000, or $250,000 if married and filing jointly, and of trusts and estates, for taxable years beginning after December 31, 2012. An individual shareholder also should be aware that the benefits of the favorable tax rates applicable to capital gain dividends and long-term capital gains may be impacted by the application of the alternative minimum tax.

Back-Up Withholding. The Trust may be required to withhold, subject to certain exemptions, at a rate of 28% (“back-up withholding”) on all distributions and redemption proceeds (including proceeds from exchanges and redemptions in-kind) paid or credited to a Fund shareholder, unless the shareholder generally certifies under penalties of perjury that the shareholder’s social security or other “taxpayer identification number” (“TIN”) provided is correct and that the shareholder is not subject to back-up withholding, or the IRS notifies the Fund that the shareholder’s TIN is incorrect or that the shareholder is subject to back-up withholding. This tax is not an additional U.S. federal income tax imposed on the shareholder, and the shareholder may claim the tax withheld as a tax payment on his or her federal income tax return, provided that the required information is furnished to the IRS. An investor must provide a valid TIN upon opening or reopening an account. If a shareholder fails to furnish a valid TIN upon request, the shareholder can also be subject to IRS penalties.

the foreign shareholder pursuant to an income tax treaty, then the tax, reporting and withholding requirements applicable to U.S. persons apply. If such capital gains or distributions are not “effectively connected” for this purpose, but the foreign shareholder meets the requirements of clause (ii) described above, such gains and distributions will be subject to U.S. federal income withholding tax at a 30% rate (or a lower rate if so provided by an applicable income tax treaty).

Foreign shareholders should consult with their tax advisers regarding the tax consequences of an investment in a Fund.

Special rules apply to foreign partnerships and those holding Fund shares through foreign partnerships.

Capital Stock

SAI, the term “1940 Act majority,” when referring to approvals to be obtained from shareholders of a Fund, means the vote of the lesser of (i) 67% of the shares of the Fund represented at a meeting if the holders of more than 50% of the outstanding shares of the Fund are present in person or by proxy, or (ii) more than 50% of the outstanding shares of the Fund. The term “majority,” when referring to the approvals to be obtained from shareholders of the Trust as a whole, means the vote of the lesser of (i) 67% of the Trust’s shares represented at a meeting if the holders of more than 50% of the Trust’s outstanding shares are present in person or by proxy, or (ii) more than 50% of the Trust’s outstanding shares.

Additional Information on the Funds

The registration statement, including the Prospectus, this SAI and the exhibits filed therewith, may be examined at the office of the SEC in Washington, D.C. Statements contained in the Prospectus or this SAI as to the contents of any contract or other document referred to herein or in the Prospectus are not necessarily complete and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.

No person has been authorized to give any information or to make any representations other than those contained in the Prospectus, this SAI and in the Trust’s official sales literature in connection with the offer of the Trust’s shares and, if given or made, such other information or representations must not be relied upon as having been authorized by the Trust. This SAI does not constitute an offer in any state in which, or to any person to whom, such offering may not lawfully be made.

Financial Statements

APPENDIX A

BlackRock ^®

U.S. Registered Funds

Proxy Voting Policy

Procedures Governing Delegation of Proxy Voting to Fund Adviser

July 1, 2011

A-1

Introduction

II.

Proxy Voting Policies

A. Boards of Directors

A-2

B. Auditors

C. Compensation and Benefits

D. Capital Structure

E. Corporate Charter and By-Laws

F. Environmental and Social Issues

III.

Conflicts Management

IV.

Reports to the Board

BlackRock will report to the Directors on proxy votes it has made on behalf of the Funds at least annually.

A-3

SAI-CFSLA-0412

PART C OTHER INFORMATION

Item 28. Exhibits


Exhibit			Description

	1		—Articles of Incorporation

		(a)	—Amended and Restated Agreement and Declaration of Trust, dated November 17, 2006.(a)

		(b)	—Amendment No. 1 to the Amended and Restated Agreement and Declaration of Trust, dated December 11, 2007.(b)

		(c)	—Amendment No. 2 to the Amended and Restated Agreement and Declaration of Trust, dated November 13, 2009.(c)

		(d)	—Restated Certificate of Trust of the Registrant, dated April 22, 2010.(d)

	2		—By-laws

		(a)	—Amended and Restated By-Laws, dated November 17, 2006.(a)

	3		—Instruments Defining Security Holders

		(a)	—Article VII of the Amended and Restated Agreement and Declaration of Trust.(a)

		(b)	—Article IV of the Amended and Restated By-Laws.(a)

	4		—Investment Advisory Contracts

		(a)	—Not applicable.

	5		—Underwriting Contracts

		(a)	—Form of Distribution Agreement between the Registrant and BlackRock Investments, LLC (“BRIL”).(g)

	6		—Bonus or Profit Sharing Contracts

		(a)	—Not applicable.

	7		—Custodian Agreements

		(a)	—Form of Service Module for Custodial Services between Registrant and State Street Bank and Trust Company (“State Street”) on behalf of the Funds.(e)

	8		—Other Material Contracts

		(a)	—Master Services Agreement between Registrant and State Street dated April 21, 2011.(e)

		(b)	—Exhibit A to Master Services Agreement between Registrant and State Street.(e)

		(c)	—Form of Service Module for Transfer Agency Services between Registrant, with respect to the BlackRock Cash Funds, and State Street.(e)

		(d)(1)	—Amended and Restated Shareholder Servicing Plan, with respect to only the LifePath Portfolios, S&P 500 Stock Fund and Bond Index Fund, effective July 1, 2012.*

		(d)(2)	—Third Amended and Restated Shareholder Servicing Plan, with respect to only the BlackRock Cash Funds and their relevant classes as listed in Schedule 1 thereto, effective July 1, 2012.*

		(e)	—Third Amended and Restated Shareholder Servicing and Processing Plan with respect to only the Trust Class Shares of the BlackRock Cash Funds listed in Schedule 1 thereto, effective July 1, 2012.*

		(f)(1)	—Administration Agreement between Registrant and BlackRock Advisors, LLC (“BAL”), with respect to the LifePath Portfolios, BlackRock Cash Funds, Bond Index Fund, CoreAlpha Bond Fund and S&P 500 Stock Fund, dated July 1, 2012.*

		(f)(2)	—Administration Agreement between the Registrant and BAL, with respect to the LifePath Index Portfolios, ACWI ex-US Index Fund and Russell 1000 Index Fund, dated July 1, 2012.*

C-1


Exhibit			Description

		(g)	—Master Administration Fee Waiver Agreement between Registrant and BAL, with respect to the Select Share Class of the BlackRock Cash Funds, dated July 1, 2012.*

		(h)	—Sub-Administration Agreement among Registrant, BAL and State Street on behalf of the Funds, dated October 21, 1996.(n)

		(i)	—Amendment to Sub-Administration Agreement among Registrant, BAL and State Street, effective December 31, 2002.(i)

		(j)	—Amendment to Sub-Administration Agreement among Registrant, BAL and State Street, effective September 1, 2004.(l)

		(k)	—Amendment to Sub-Administration Agreement among Registrant, BAL and State Street, effective January 1, 2006.(a)

		(l)	—Amendment to Sub-Administration Agreement among Registrant, BAL and State Street, effective January 1, 2007.(a)

		(m)	—Revised Master Fee Schedule to the Sub-Administration Agreement between Registrant, BAL and State Street, dated January 1, 2006.(a)

		(n)	—Service Agreement between Registrant and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) on behalf of the Funds, dated December 31, 1997.(m)

		(o)	—Financial Services Agreement between Registrant and Merrill Lynch on behalf of the Funds, dated December 31, 1997.(m)

		(p)	—License Agreement between Standard & Poor’s and BlackRock Institutional Trust Company, N.A. (“BTC”) (formerly BGI), dated January 1, 2003.(i)

		(q)	—Amended and Restated Securities Lending Agency Agreement between Registrant and BTC, dated November 2, 2009.(c).

		(r)	—Schedule A to the Amended and Restated Securities Lending Agency Agreement between Registrant and BTC, dated November 2, 2009.(c)

		(s)	—Exhibit A to the Amended and Restated Securities Lending Agency Agreement between Registrant and BTC, dated November 2, 2009.(c)

		(t)	—Amended and Restated Independent Expense Reimbursement Agreement among Registrant, Master Investment Portfolio (“MIP”), BAL and BlackRock Fund Advisors, dated July 1, 2012.*

		(u)	—Form of Transfer Agency Agreement between the Registrant, with respect to ACW ex-US Index Fund, Bond Index Fund, CoreAlpha Bond Index Fund, the LifePath Index Portfolios, the LifePath Portfolios and S&P 500 Stock Fund, and PNC Global Investment Servicing (U.S.) Inc.*

	9		—Legal Opinion

		(a)	—Opinion of Wilmer Cutler Pickering Hale and Dorr LLP.(k)

	10		—Other Opinions

		(a)	—Consent of PricewaterhouseCoopers LLP.*

	11		—Omitted Financial Statements

		(a)	—Not applicable.

	12		—Initial Capital Agreements

		(a)	—Not applicable.

	13		—Rule 12b-1 Plan

		(a)	—Amended and Restated Distribution and Service Plan, dated May 16, 2012, with respect to the LifePath Portfolios, Bond Index Fund, CoreAlpha Bond Fund and S&P 500 Stock Fund.*

C-2


Exhibit			Description

		(b)	—Form of Investor A Distribution Plan with respect to the LifePath Index Portfolios, ACWI ex-US Index Fund and Russell 1000 Index Fund.(j)

		(c)	—Aon Captives Share Class Distribution Plan, dated March 2, 2005.(i)

	14		—Rule 18f-3 Plan

		(a)	—Form of Amended and Restated Rule 18f-3 Multi-Class Plan, dated September 20, 2012.*

		(b)	—Form of Amended Appendix A to the Rule 18f-3 Multi-Class Plan, dated September 20, 2012.*

	15		—Reserved

	16		—Codes of Ethics

		(a)	—Registrant Code of Ethics.(c)

		(b)	—Code of Ethics of BlackRock Investments, LLC.(f)

	99		—Power of Attorney

		(a)	—Power of Attorney.(h)

*	Filed herewith.

(a)	Filed on April 30, 2007 as an Exhibit to Post-Effective Amendment No. 59 to BlackRock Fund III’s (the “Registrant,” and the series thereof, the “Funds”) Registration Statement on Form N-1A under the Securities Act of 1933, as amended (File No. 33-54126). (the “Registration Statement.”)

(b)	Filed on December 27, 2007 as an Exhibit to Post-Effective Amendment No. 62 to the Registration Statement.

(c)	Filed on December 29, 2009 as an Exhibit to Post-Effective Amendment No. 81 to the Registration Statement.

(d)	Filed April 30, 2010 as an Exhibit to Post-Effective Amendment No. 88 to the Registration Statement.

(e)	Filed June 29, 2011 as an Exhibit to Registrant’s Post-Effective Amendment No. 125.

(f)	Incorporated by reference to Exhibit 15(b) to Post-Effective Amendment No. 44 to the Registration Statement on Form N-1A of Ready Assets Prime Money Fund (File No. 2-52711), filed on April 29, 2009.

(g)	Incorporated by reference to Exhibit 5(a) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A of BlackRock Global Emerging Markets Fund, Inc. (File No. 33-28248), filed on October 28, 2008.

(h)	Incorporated by reference to an Exhibit to Post-Effective Amendment No. 94 to the Registration Statement on Form N-1A of BlackRock Liquidity Funds (File No. 2-47015), filed on February 28, 2013.

(i)	Filed March 2, 2006 as an Exhibit to Registrant’s Post-Effective Amendment No. 57.

(j)	Incorporated by reference to Exhibit 13(a) to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of BlackRock Global SmallCap Fund, Inc. (File No. 33-53399), filed on October 28, 2008.

(k)	Incorporated by reference to Exhibit (i) to Post-Effective Amendment No. 78 to the Registration Statement on Form N-1A of BlackRock Funds III (File No. 33-54126), filed on October 30, 2009.

(l)	Filed April 28, 2006 as an Exhibit to Registrant’s Post-Effective Amendment No. 58.

(m)	Filed June 30, 1998 as an Exhibit to Registrant’s Post-Effective Amendment No. 15.

(n)	Filed June 30, 1997 as Exhibit to Registrant’s Post-Effective Amendment No. 14.

C-3

Item 29. Persons Controlled by or Under Common Control with Registrant

The chart below identifies persons who, as of April 2, 2013, are controlled by or who are under common control with the Registrant. For purposes of the Investment Company Act of 1940, as amended (the “1940 Act”), any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to “control” such company. Each of the companies listed below is organized under the laws of the State of Delaware.


Fund	Person Controlled by or under Common Control with the Registrant	Percentage of Voting Securities
LifePath ^® Retirement Portfolio	LifePath Retirement Master Portfolio 400 Howard Street San Francisco, CA 94105	38%
LifePath 2020 Portfolio ^®	LifePath 2020 Master Portfolio 400 Howard Street San Francisco, CA 94105	43%
LifePath 2030 Portfolio ^®	LifePath 2030 Master Portfolio 400 Howard Street San Francisco, CA 94105	43%
LifePath 2040 Portfolio ^®	LifePath 2040 Master Portfolio 400 Howard Street San Francisco, CA 94105	46%
LifePath ^® 2050 Portfolio	LifePath 2050 Master Portfolio 400 Howard Street San Francisco, CA 94105	57%
BlackRock Cash Funds: Government	Government Money Market Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
BlackRock Cash Funds: Institutional	Money Market Master Portfolio 400 Howard Street San Francisco, CA 94105	98%
BlackRock Cash Funds: Prime	Prime Money Market Master Portfolio 400 Howard Street San Francisco, CA 94105	89%
BlackRock Cash Funds: Treasury	Treasury Money Market Master Portfolio 400 Howard Street San Francisco, CA 94105	66%
LifePath ^® 2025 Portfolio	LifePath 2025 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® 2035 Portfolio	LifePath 2035 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® 2045 Portfolio	LifePath 2045 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® 2055 Portfolio	LifePath 2055 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index Retirement Portfolio	LifePath ^® Index Retirement Master Portfolio 400 Howard Street San Francisco, CA 94105	100%

C-4


Fund	Person Controlled by or under Common Control with the Registrant	Percentage of Voting Securities
LifePath ^® Index 2020 Portfolio	LifePath ^® Index 2020 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2025 Portfolio	LifePath ^® Index 2025 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2030 Portfolio	LifePath ^® Index 2030 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2035 Portfolio	LifePath ^® Index 2035 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2040 Portfolio	LifePath ^® Index 2040 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2045 Portfolio	LifePath ^® Index 2045 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2050 Portfolio	LifePath ^® Index 2050 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%
LifePath ^® Index 2055 Portfolio	LifePath ^® Index 2055 Master Portfolio 400 Howard Street San Francisco, CA 94105	100%

Item 30. Indemnification

Section 10.02 of the Registrant’s Amended and Restated Agreement and Declaration of Trust provides:

(a) Subject to the exceptions and limitations contained in paragraph (b) below: (i) every Person who is, or has been, a Trustee or officer of the Trust (hereinafter referred to as a “Covered Person”) shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit, or proceeding in which he or she becomes involved as a party or otherwise by virtue of his being or having been a Trustee or officer and against amounts paid or incurred by him or her in the settlement thereof; and (ii) the words “claim,” “action,” “suit,” or “proceeding” shall apply to all claims, actions, suits, or proceedings (civil, criminal, or other, including appeals), actual or threatened, while in office or thereafter, and the words “liability” and “expenses” shall include, without limitation, attorney’s fees, costs, judgments, amounts paid in settlement, fines, penalties, and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office: (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who neither are Interested Persons of the Trust nor are parties to the matter based upon a review of readily-available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily-available facts (as opposed to a full trial-type inquiry); provided, however, that any Shareholder, by appropriate legal proceedings, may challenge any such determination by the Trustees or by independent counsel.

C-5

(c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person and shall inure to the benefit of the heirs, executors, and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel, other than Covered Persons, and other persons may be entitled by contract or otherwise under law.

(d) To the maximum extent permitted by applicable law, expenses in connection with the preparation and presentation of a defense to any claim, action, suit, or proceeding of the character described in paragraph (a) of this Section 10.02 may be paid by the Trust or Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be repaid by such Covered Person to the Trust or Series if it ultimately is determined that he or she is not entitled to indemnification under this Section 10.02; provided, however, that either (i) such Covered Person shall have provided a surety bond or some other appropriate security for such undertaking; (ii) the Trust or Series thereof is insured against losses arising out of any such advance payments, or (iii) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily-available facts (as opposed to a trial-type inquiry or full investigation), that there is a reason to believe that such Covered Person will be entitled to indemnification under this Section 10.02. In connection with any determination pursuant to clause (iii) of the preceding sentence, any Covered Person who is a Trustee and is not an Interested Person of the Trust and any Covered Person who has been a Trustee and at such time was not an Interested Person of the Trust shall be entitled to a rebuttable presumption that he or she has not engaged in willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Item 31. Business and Other Connections of Investment Adviser s

(a) BlackRock Fund Advisors (“BFA”) is an indirect wholly-owned subsidiary of BlackRock, Inc. located at 400 Howard Street, San Francisco, California 94105. BFA’s business is that of a registered investment adviser to certain open end, management investment companies and various other institutional investors. The information required by this Item 31 about officers and directors of BFA, together with information as to any other business profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Schedule A and D of Form ADV, filed by BFA pursuant to the Investment Advisers Act of 1940, as amended (File No. 801-22609).

(b) BlackRock Advisors, LLC (“BAL”) is an indirect wholly-owned subsidiary of BlackRock, Inc. located at 100 Bellevue Parkway, Wilmington, Delaware 19809. BAL was organized in 1994 for the purpose of providing advisory services to investment companies. The information required by this Item 31 about officers and directors of BAL, together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Schedules A and D of Form ADV, filed by BAL pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-47710).

(c) BlackRock International Limited (“BIL”) is located at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB. The information required by this Item 31 of officers and directors of BIL, together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Schedules A and D of Form ADV, filed by BIL pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-51087).

C-6

Item 32. Principal Underwriters

(a) BRIL acts as the principal underwriter or placement agent, as applicable, for each of the following open-end registered investment companies including the Registrant:


BBIF Government Securities Fund		BlackRock Municipal Bond Fund, Inc.
BBIF Money Fund		BlackRock Municipal Series Trust
BBIF Tax-Exempt Fund		BlackRock Natural Resources Trust
BBIF Treasury Fund		BlackRock Pacific Fund, Inc.
BIF Government Securities Fund		BlackRock Series Fund, Inc.
BIF Money Fund		BlackRock Series, Inc.
BIF Multi-State Municipal Series Trust		BlackRock Value Opportunities Fund, Inc.
BIF Tax-Exempt Fund		BlackRock Variable Series Funds, Inc.
BIF Treasury Fund		BlackRock World Income Fund, Inc.
BlackRock Allocation Target Shares		FDP Series, Inc.
BlackRock Balanced Capital Fund, Inc.		Funds For Institutions Series
BlackRock Basic Value Fund, Inc.		iShares, Inc.
BlackRock Bond Fund, Inc.		iShares MSCI Russia Capped Index Fund, Inc.
BlackRock California Municipal Series Trust		iShares Trust
BlackRock Capital Appreciation Fund, Inc.		iShares U.S. ETF Trust
BlackRock Emerging Markets Fund, Inc.		Managed Account Series
BlackRock Equity Dividend Fund		Master Basic Value LLC
BlackRock EuroFund		Master Bond LLC
BlackRock Financial Institutions Series Trust		Master Focus Growth LLC
BlackRock Focus Growth Fund, Inc.		Master Government Securities LLC
BlackRock Funds		Master Institutional Money Market LLC
BlackRock Funds II		Master Investment Portfolio
BlackRock Funds III		Master Large Cap Series LLC
BlackRock Global Allocation Fund, Inc.		Master Money LLC
BlackRock Global SmallCap Fund, Inc.		Master Tax-Exempt LLC
BlackRock Index Funds, Inc.		Master Treasury LLC
BlackRock Large Cap Series Funds, Inc.		Master Value Opportunities LLC
BlackRock Latin America Fund, Inc.		Quantitative Master Series LLC
BlackRock Liquidity Funds		Ready Assets Prime Money Fund
BlackRock Long-Horizon Equity Fund		Ready Assets U.S.A. Government Money Fund
BlackRock Master LLC		Ready Assets U.S. Treasury Money Fund
BlackRock Mid Cap Value Opportunities Series, Inc.		Retirement Series Trust
BlackRock Multi-State Municipal Series Trust

C-7

BRIL also acts as the principal underwriter or placement agent, as applicable, for the following closed-end registered investment company:

BlackRock Fixed Income Value Opportunities

(b) Set forth below is information concerning each director and officer of BRIL. The principal business address for each such person is 40 East 52nd Street, New York, New York 10022.


Name	Position(s) and Office(s) with BRIL	Position(s) and Office(s) with Registrant
Laurence Fink	Chairman and Member, Board of Managers	None
Robert Fairbairn	Chief Executive Officer and Senior Managing Director	None
Anne Ackerley	Managing Director	None
Matthew Mallow	General Counsel and Senior Managing Director	None
Russell McGranahan	Secretary and Managing Director	None
James Smith	Chief Compliance Officer and Director	None
Saurabh Pathak	Chief Financial Officer and Director	None
Sally George	Managing Director	None
Francis Porcelli	Managing Director	None
Brenda Sklar	Managing Director	None
Lisa Hill	Managing Director	None
Joseph Craven	Managing Director	None
Melissa Walker	Vice President and Assistant Secretary	None
Chris Nugent	Director	None
Robert Kapito	Member, Board of Managers	None
Daniel Waltcher	Member, Board of Managers	None

Item 33. Location of Accounts and Records

(a) The Registrant maintains accounts, books and other documents required by Section 31(a) of the 1940 Act and the rules thereunder (collectively, “Records”) at the offices of State Street Bank and Trust Company (“State Street”), 100 Summer Street, Boston, Massachusetts 02110.

(b) BFA maintains all Records relating to its services as adviser or sub-adviser, as applicable, to series of MIP at 400 Howard Street, San Francisco, California 94105.

(c) BlackRock Advisors, LLC maintains all Records relating to its services as adviser to CoreAlpha Bond Master Portfolio and as administrator to the Funds at 100 Bellevue Parkway, Wilmington, Delaware 19809.

(d) BlackRock International Limited maintains all Records relating to its services as sub-adviser of CoreAlpha Bond Master Portfolio at 40 Torphichen Street, Edinburgh, Scotland EH3 8JB.

(e) BRIL maintains all Records relating to its services as distributor of the Funds at 40 East 52nd Street, New York, New York 10022.

(f) State Street maintains all Records relating to its services as sub-administrator, transfer agent of certain Funds and custodian at 100 Summer Street, Boston, Massachusetts 02110.

(g) BNY Mellon Investment Servicing (US) Inc. maintains all Records relating to its services as transfer agent of certain Funds at 301 Bellevue Parkway, Wilmington, Delaware 19809.

Item 34. Management Services

Other than as set forth under the caption “Management and Other Service Arrangements” in the Statements of Additional Information Part II constituting Part B of this Registration Statement, the Registrant is not a party to any management-related service contract.

Item 35. Undertakings

Not applicable.

C-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment to the Registration Statement pursuant to Rule 485(b) under the Securities Act and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of New York, and the State of New York, on April 30, 2013.


B LACK R OCK F UNDS III ON BEHALF OF B LACK R OCK C ASH F UNDS : I NSTITUTIONAL , B LACK R OCK C ASH F UNDS : P RIME , B LACK R OCK C ASH F UNDS : G OVERNMENT AND B LACK R OCK C ASH F UNDS : T REASURY

By		/ S / J OHN M. P ERLOWSKI
		John M. Perlowski
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to its Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.


Signature	Title	Date

/ S / J OHN M. P ERLOWSKI John M. Perlowski	President and Chief Executive Officer (Principal Executive Officer)	April 30, 2013

/ S / N EAL J. A NDREWS Neal J. Andrews	Chief Financial Officer (Principal Financial and Accounting Officer)	April 30, 2013

D AVID O. B EIM * David O. Beim	Trustee

R ONALD W. F ORBES * Ronald W. Forbes	Trustee

D R . M ATINA S. H ORNER * Dr. Matina S. Horner	Trustee

R ODNEY D. J OHNSON * Rodney D. Johnson	Trustee

H ERBERT I. L ONDON * Herbert I. London	Trustee

I AN A. M AC K INNON * Ian A. MacKinnon	Trustee

C YNTHIA A. M ONTGOMERY * Cynthia A. Montgomery	Trustee

J OSEPH P. P LATT * Joseph P. Platt	Trustee

C-9


Signature	Title	Date

R OBERT C. R OBB , J R .* Robert C. Robb, Jr.	Trustee

T OBY R OSENBLATT * Toby Rosenblatt	Trustee

K ENNETH L. U RISH * Kenneth L. Urish	Trustee

F REDERICK W. W INTER * Frederick W. Winter	Trustee

P AUL L. A UDET * Paul L. Audet	Trustee

H ENRY G ABBAY * Henry Gabbay	Trustee



*By:	/ S / B ENJAMIN A RCHIBALD	April 30, 2013
	Benjamin Archibald (Attorney-in-Fact)

C-10

SIGNATURES

Master Investment Portfolio has duly caused this Registration Statement of BlackRock Funds III to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, and the State of New York, on April 30, 2013.


M ASTER I NVESTMENT P ORTFOLIO ON B EHALF OF M ONEY M ARKET M ASTER P ORTFOLIO , P RIME M ONEY M ARKET M ASTER P ORTFOLIO , G OVERNMENT M ONEY M ARKET M ASTER P ORTFOLIO AND T REASURY M ONEY M ARKET M ASTER P ORTFOLIO

By		/ S / J OHN M. P ERLOWSKI
		John M. Perlowski President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement of BlackRock Funds III has been signed below by the following persons in the capacities and on the dates indicated.


Signature	Title	Date

/ S / J OHN M. P ERLOWSKI John M. Perlowski	President and Chief Executive Officer (Principal Executive Officer)	April 30, 2013

/ S / N EAL J. A NDREWS Neal J. Andrews	Chief Financial Officer (Principal Financial and Accounting Officer)	April 30, 2013

D AVID O. B EIM * David O. Beim	Trustee

R ONALD W. F ORBES * Ronald W. Forbes	Trustee

D R . M ATINA S. H ORNER * Dr. Matina S. Horner	Trustee

R ODNEY D. J OHNSON * Rodney D. Johnson	Trustee

H ERBERT I. L ONDON * Herbert I. London	Trustee

I AN A. M AC K INNON * Ian A. MacKinnon	Trustee

C YNTHIA A. M ONTGOMERY * Cynthia A. Montgomery	Trustee

J OSEPH P. P LATT * Joseph P. Platt	Trustee

C-11s


Signature	Title	Date

R OBERT C. R OBB , J R .* Robert C. Robb, Jr.	Trustee

T OBY R OSENBLATT * Toby Rosenblatt	Trustee

K ENNETH L. U RISH * Kenneth L. Urish	Trustee

F REDERICK W. W INTER * Frederick W. Winter	Trustee

P AUL L. A UDET * Paul L. Audet	Trustee

H ENRY G ABBAY * Henry Gabbay	Trustee



*By:	/ S / B ENJAMIN A RCHIBALD	April 30, 2013
	Benjamin Archibald (Attorney-in-Fact)

C-12

EXHIBIT INDEX


Exhibit Number			Description

	8	(d)(1)	Amended and Restated Shareholder Servicing Plan, with respect to only the LifePath Portfolios, S&P 500 Stock Fund and Bond Index Fund, effective July 1, 2012.

	8	(d)(2)	Third Amended and Restated Shareholder Servicing Plan, with respect to only the BlackRock Cash Funds and their relevant classes as listed in Schedule 1 thereto, effective July 1, 2012.

	8	(e)	Third Amended and Restated Shareholder Servicing and Processing Plan with respect to only the Trust Class Shares of the BlackRock Cash Funds listed in Schedule 1 thereto, effective July 1,2012.

	8	(f)(1)	Administration Agreement between Registrant and BlackRock Advisors, LLC (“BAL”), with respect to the LifePath Portfolios, BlackRock Cash Funds, Bond Index Fund, CoreAlpha Bond Fund and S&P 500 Stock Fund, dated July 1, 2012.

	8	(f)(2)	Administration Agreement between the Registrant and BAL, with respect to the LifePath Index Portfolios, ACWI ex-US Index Fund and Russell 1000 Index Fund, dated July 1, 2012.

	8	(g)	Master Administration Fee Waiver Agreement between Registrant and BAL, with respect to the Select Share Class of the BlackRock Cash Funds, dated July 1, 2012.

	8	(t)	Amended and Restated Independent Expense Reimbursement Agreement among Registrant, Master Investment Portfolio (“MIP”), BAL and BlackRock Fund Advisors, dated July 1, 2012.

	8	(u)	Form of Transfer Agency Agreement between the Registrant, with respect to ACW ex-US Index Fund, Bond Index Fund, CoreAlpha Bond Index Fund, the LifePath Index Portfolios, the LifePath Portfolios and S&P 500 Stock Fund, and PNC Global Investment Servicing (U.S.) Inc.

	10	(a)	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm for the Registrant.

	13	(a)	Amended and Restated Distribution and Service Plan, dated May 16, 2012, with respect to the LifePath Portfolios, Bond Index Fund, CoreAlpha Bond Fund and S&P 500 Stock Fund.

	14	(a)	Form of Amended and Restated Rule 18f-3 Multi-Class Plan, dated September 20, 2012.

	14	(b)	Form of Amended Appendix A to the Rule 18f-3 Multi-Class Plan, dated September 20, 2012.

Exhibit 8(d)(1)

BLACKROCK FUNDS III

AMENDED AND RESTATED SHAREHOLDER SERVICING PLAN

Introduction: The Board of Trustees (the “Board”) of BlackRock Funds III (the “Trust”) previously approved a Shareholder Servicing Plan on February 22, 2010 (the “Initial Plan”) with respect to the various classes of shares (each, a “Class”) of certain portfolios of the Trust, as such list of portfolios may be revised from time to time (each, a “Fund”). In connection with the change in the administrator of the Trust from BlackRock Institutional Trust Company, N.A. to BlackRock Advisors, LLC (the “Administrator”), the Board approved an amendment and restatement to the Initial Plan, as set forth in this Amended and Restated Shareholder Servicing Plan (this “Plan”), to authorize the Administrator to engage and pay certain financial institutions, securities dealers and other industry professionals (collectively, “Shareholder Servicing Agents”) for providing services to Fund shareholders. The Initial Plan was not, and this Plan is not to be, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Act”), and the fee under the Initial Plan and this Plan is intended to be a “service fee,” as defined in Conduct Rule 2830 of the Financial Industry Regulatory Authority, Inc.

The Board requested and evaluated such information as it deemed necessary to an informed determination as to whether the Initial Plan should be amended and restated, and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use Trust assets for such purposes.

In voting to approve the implementation of this Plan, the Board concluded, in the exercise of its reasonable business judgment and in light of applicable fiduciary duties, that there is a reasonable likelihood that this Plan will benefit the Trust and its shareholders.

The Plan: The material aspects of this Plan are as follows:

1. Fees. The Trust is permitted to pay to one or more Shareholder Servicing Agents a maximum fee per Class at the annual rate set forth opposite the name of each Fund’s Class on Schedule 1 hereto, based upon the value of such Class’s average daily net assets, in respect of the provision of personal services to shareholders of such Class and/or the maintenance of shareholder accounts. The Board has delegated to the Administrator and the Administrator has assumed certain responsibilities with respect to the Shareholder Servicing Agents, including the obligation to pay the Shareholder Servicing Agents such compensation as their respective shareholder servicing agreements may provide. The Board shall retain the authority to determine the maximum shareholder servicing fee that the Administrator may agree to pay to the Shareholder Servicing Agents pursuant to this Plan.

2. Services. Payments of the shareholder servicing fee shall be used to compensate Shareholder Servicing Agents for serving as agents of the Trust for the limited purpose of accepting orders to purchase or redeem Fund shares and for providing services including, but not limited to: (a) providing sub-accounting for Fund shares beneficially owned by shareholders or the information necessary for such sub-accounting; (b) aggregating and processing purchase and

redemption requests and placing net purchase and redemption orders with the Fund’s Transfer Agent or distributor; (c) providing periodic statements showing account balances and, to the extent practicable, integrating such information with other transactions otherwise effected by the Shareholder Servicing Agent; (d) furnishing (either separately or on an integrated basis with other reports sent to an account by a Shareholder Servicing Agent) monthly and annual statements and confirmations of all purchases and redemptions of Fund shares; (e) transmitting, on behalf of the Fund, proxy statements, shareholder reports, prospectuses and other communications from the Fund or the Administrator to accounts; (f) receiving, tabulating and transmitting to the Fund or the Administrator proxies executed by shareholders with respect to shareholder meetings; (g) arranging for wiring of funds and transmitting and receiving funds in connection with orders to purchase or redeem Fund shares; (h) processing dividend payments from the Fund on behalf of shareholders; (i) providing such other similar services as the Fund or the Administrator may request; and (j) providing necessary personnel and facilities to conduct the activities described above.

3. Authorization of the Administrator: The Board has determined that it is consistent with the best interests of the Funds and appropriate in furtherance of the purposes of this Plan that the Administrator, by operation of this Plan, be authorized as follows:

(a) New Agreements. With respect to new agreements entered into after the date of this restatement, (i) to identify Shareholder Servicing Agents; (ii) to appoint Shareholder Servicing Agents to act as agents for the Trust for the limited purpose of accepting orders to purchase or redeem Fund shares and (iii) to engage Shareholder Servicing Agents to perform shareholder servicing services by entering into shareholder servicing agreements; (iv) to terminate Shareholder Servicing Agents, pursuant to the terms of the relevant agreements; and (v) to pay Shareholder Servicing Agents out of the Administrator’s fees the amount due them under the shareholder servicing agreements, subject to compliance by a Shareholder Servicing Agent with the terms of the related agreements between the Shareholder Servicing Agent and the Administrator. Forms of agreement entered into by the Administrator in connection with this Plan will be presented to the Board from time to time, but the Board has determined that the Administrator may enter into agreements with the Shareholder Servicing Agents that differ from those forms in such form or substance as the Administrator deems necessary or appropriate; provided, however, that the Administrator shall not have authority to exceed the maximum fee set by the Board for agreements entered into in connection with this Plan nor to eliminate terms creating third party beneficiary or similar rights in favor of the Trust or the Funds.

(b) Existing Agreements. With respect to existing shareholder servicing agreements between a Shareholder Servicing Agent and the Trust, (i) to amend or restate such agreements, or any terms thereof, as the Administrator deems necessary or appropriate; (ii) to terminate such agreements or cause them to be superseded by new agreements in accordance with paragraph 3(a) above; and (iii) to pay the Shareholder Servicing Agents out of the Administrator’s fees the amounts due them under the shareholder servicing agreements between the Shareholder Servicing Agent and the Trust.

4. Fee Calculation. For the purpose of determining the fees payable under this Plan, the value of the net assets of each Fund shall be computed in the manner specified in the Trust’s registration statement on Form N-1A for the computation of the value of the Fund’s net assets.

5. Reporting. The Administrator shall provide the Board, at least quarterly, with a written report that includes the names of the firms that serve as Shareholder Servicing Agents pursuant to agreements entered into in connection with this Plan and all amounts actually expended during the reporting period pursuant to this Plan, expressed both as dollar amounts and percentages. The report shall state the purpose for which the amounts were expended; provided, however, it shall be assumed that the purposes are to compensate Shareholder Servicing Agents for some or all of the of services described above in paragraph 2. BlackRock Fund Advisors, as adviser to the Master Investment Portfolio (“MIP”), shall identify amounts received by the Administrator from the Trust and retained as compensation separately in reports presented to the Board in connection with the annual approval of the MIP advisory agreements.

6. Effectiveness. This Plan will become effective immediately upon approval by a majority of the Board members, including a majority of the Board members who are not “interested persons” (as defined in the Act) of the Trust and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan or on such later date as the Board may designate (the “Effective Date”).

7. Term. This Plan shall continue for a period of one year from its Effective Date, unless earlier terminated in accordance with its terms, and thereafter shall continue automatically for successive annual periods, provided such continuance is approved at least annually in the manner provided in paragraph 6 hereof. This Plan is terminable without penalty at any time by vote of a majority of the Board members who are not “interested persons” (as defined in the Act) of the Trust and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan.

8. Amendments. This Plan may be amended at any time by the Board, provided that any material amendments of the terms of this Plan shall become effective only upon approval as provided in paragraph 6 hereof.

9. Limitation of Liability. The obligations hereunder and under any agreement shall only be binding upon the assets and property of the relevant Fund, as provided for in the Trust’s Agreement and Declaration of Trust and By-Laws and shall not be binding upon any Trustee, officer or shareholder of the Trust or Fund individually.

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012 and effective July 1, 2012.

SCHEDULE 1

Fees are expressed as a percentage of the average daily net asset value of the particular Class of the particular Fund beneficially owned by or attributable to clients of the Shareholder Servicing Agent.


Fund and Share Classes	Maximum Annual Fee Rate
LifePath Retirement Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%

LifePath 2020 Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%

LifePath 2025 Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%

LifePath 2030 Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%

LifePath 2035 Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%

LifePath 2040 Portfolio
Investor A		0.25	%
Investor C		0.25	%
Class R		0.25	%
Institutional		0.25	%


LifePath 2045 Portfolio
Investor A	0.25	%
Investor C	0.25	%
Class R	0.25	%
Institutional	0.25	%

LifePath 2050 Portfolio
Investor A	0.25	%
Investor C	0.25	%
Class R	0.25	%
Institutional	0.25	%

LifePath 2055 Portfolio
Investor A	0.25	%
Investor C	0.25	%
Class R	0.25	%
Institutional	0.25	%

BlackRock CoreAlpha Bond Fund
Institutional	0.25	%
Investor A	0.25	%
Investor C	0.25	%

BlackRock Bond Index Fund
Institutional	0.25	%
Investor A	0.25	%
Class K	0.25	%

BlackRock S&P 500 Stock Fund
Institutional	0.15	%
Investor A	0.15	%
Investor A1	0.15	%
Investor B	0.15	%
Investor C1	0.15	%
Service	0.15	%
Class K	0.15	%

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012, as amended May 16, 2012, and effective July 1, 2012.

Exhibit 8(d)(2)

BLACKROCK FUNDS III

THIRD AMENDED AND RESTATED

SHAREHOLDER SERVICING PLAN

Introduction: The Board of Trustees (the “Board”) of BlackRock Funds III (the “Trust”) previously approved a Shareholder Servicing Plan on November 27, 2001 (the “Initial Plan”) with respect to the various classes of shares (each, a “Class”) of certain portfolios of the Trust, as such list of portfolios may be revised from time to time (each, a “Fund”). The Board approved amendments to the Initial Plan, most recently on February 22, 2010. In connection with the change in the administrator of the Trust from BlackRock Institutional Trust Company, N.A. to BlackRock Advisors, LLC (the “Administrator”), the Board approved a further amendment and restatement to the Initial Plan, as set forth in this Third Amended and Restated Shareholder Servicing Plan (this “Plan”), to authorize the Administrator to engage and pay certain financial institutions, securities dealers and other industry professionals (collectively, “Shareholder Servicing Agents”) for providing services to Fund shareholders. The Initial Plan was not, and this Plan is not adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Act”), and the fee under the Initial Plan and this Plan is intended to be a “service fee,” as defined in Conduct Rule 2830 of the Financial Industry Regulatory Authority, Inc.

The Plan: The material aspects of this Plan are as follows:

limited to: (a) answering inquiries from shareholders regarding account status and history, the manner in which purchases and redemptions of shares may be effected, and other matters pertaining to the Funds; (b) assisting shareholders in designating and changing dividend options, account designations and addresses; (c) providing sub-accounting for Fund shares beneficially owned by shareholders or the information necessary for such sub-accounting; (d) aggregating and processing purchase and redemption requests and placing net purchase and redemption orders with the Fund’s Transfer Agent or distributor; (e) verifying and guaranteeing shareholder signatures in connection with orders to purchase or redeem Fund shares; (f) providing periodic statements showing account balances and, to the extent practicable, integrating such information with other transactions otherwise effected by the Shareholder Servicing Agent; (g) furnishing (either separately or on an integrated basis with other reports sent to an account by a Shareholder Servicing Agent) monthly and annual statements and confirmations of all purchases and redemptions of Fund shares; (h) transmitting, on behalf of the Fund, proxy statements, shareholder reports, prospectuses and other communications from the Fund or the Administrator to accounts; (i) receiving, tabulating and transmitting to the Fund or the Administrator proxies executed by shareholders with respect to shareholder meetings; (j) arranging for wiring of funds and transmitting and receiving funds in connection with orders to purchase or redeem Fund shares; (k) processing dividend payments from the Fund on behalf of shareholders; (1) providing such other similar services as the Fund or the Administrator may request; and (m) providing necessary personnel and facilities to conduct the activities described above.

6. Effectiveness. This Plan will become effective immediately upon approval by a majority of the Board members, including a majority of the Board members who are not “interested persons” (as defined in the Act) of the Trust and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan, or on such later date as the Board may designate (the “Effective Date”).

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012 and effective July 1, 2012.

SCHEDULE 1


Fund and Share Classes	Maximum Annual Fee Rate
BlackRock Cash Funds: Institutional
Institutional Class		0.05%
Capital Class		0.07%
Premium Class		0.10%
Select Class		0.15%
Aon Captives Shares		0.05%
BlackRock Cash Funds: Prime
Institutional Class		0.05%
Capital Class		0.07%
Premium Class		0.10%
Select Class		0.15%
BlackRock Cash Funds: Government
Institutional Class		0.05%
Capital Class		0.07%
Premium Class		0.10%
Select Class		0.15%
BlackRock Cash Funds: Treasury
Institutional Class		0.05%
Capital Class		0.07%
Premium Class		0.10%
Select Class		0.15%

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012 and effective July 1, 2012.

Schedule I to BlackRock Funds III Third Amended and Restated Shareholder Servicing Plan

Exhibit 8(e)

BLACKROCK FUNDS III

THIRD AMENDED AND RESTATED

SHAREHOLDER SERVICING AND PROCESSING PLAN

Introduction: The Board of Trustees (the “Board”) of BlackRock Funds III (the “Trust”) previously approved an Amended and Restated Shareholder Servicing and Processing Plan on March 14-15, 2006 (the “Current Plan”) with respect to the various classes of shares (each, a “Class”) of the portfolios of the Trust listed on Schedule 1 hereto, as such Schedule 1 may be revised from time to time (each, a “Fund”). The Board approved amendments to the Current Plan, most recently on February 22, 2010. In connection with the change in the administrator of the Trust from BlackRock Institutional Trust Company, N.A. to BlackRock Advisors LLC (the “Administrator”), the Board has approved a further amendment and restatement of the Current Plan, as set forth in this Third Amended and Restated Shareholder Servicing and Processing Plan (this “Plan”), to authorize the Administrator to engage and pay certain financial institutions, securities dealers and other industry professionals (collectively, “Shareholder Servicing Agents”) for providing services to Fund shareholders. For purposes of this Plan, Fund shareholders shall include: direct Fund shareholders; persons beneficially owning Fund shares through omnibus accounts or other intermediary accounts; participants in employee benefit, retirement or similar plans notwithstanding that the plan may be deemed to be the beneficial owner of Fund shares; and the holders of interests in a variable annuity or variable life insurance contract issued by a Shareholder Servicing Agent. The Current Plan was not, and this Plan is not, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Act”).

The Board requested and evaluated such information as it deemed necessary to an informed determination as to whether the Current Plan should be amended and restated, and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use Trust assets for such shareholder servicing and processing purposes.

This Plan: The material aspects of this Plan are as follows:

1. Fees: The Trust is permitted to pay to one or more Shareholder Servicing Agents a maximum shareholder servicing fee and maximum processing fee per Class, as applicable, at the annual rate set forth opposite the name of each Class on Schedule 1 hereto, based upon the value of such Class’s average daily net assets, in respect of the services described below. The Board has delegated to the Administrator and the Administrator has assumed certain responsibilities with respect to the Shareholder Servicing Agents, including the obligation to pay the Shareholder Servicing Agents such compensation as their respective shareholder servicing agreements may provide. The Board shall retain the authority to determine the maximum shareholder servicing fee and maximum processing fee that the Administrator may agree to pay

to the Shareholder Servicing Agents pursuant to this Plan. All or a portion of the shareholder servicing fee under the Plan is intended to be a “service fee” as defined in Conduct Rule 2830 of the Financial Industry Regulatory Authority, Inc. or any successor thereto. It is intended that none of the services provided in consideration of the processing fee be of a nature as to render the processing fee a “service fee” as defined in such Rule.

2. Shareholder Servicing: Payments of the shareholder servicing fee shall be used to compensate Shareholder Servicing Agents for providing general shareholder liaison services, including, but not limited to: (a) answering inquiries from shareholders regarding account status and history, the manner in which purchases and redemptions of the Fund shares may be effected, and other matters pertaining to the Funds; (b) assisting shareholders in designating and changing dividend options, account designations and addresses; (c) arranging for wiring of funds and transmitting and receiving funds in connection with orders to purchase or redeem Fund shares; (d) verifying and guaranteeing shareholder signatures in connection with orders to purchase or redeem Fund shares; (e) providing such other similar services related to the maintenance of shareholder accounts; and (f) providing necessary personnel and facilities to conduct the activities described above.

3. Processing: Payment of the processing fee shall be used to compensate Shareholder Servicing Agents for serving as agents of the Trust for the limited purpose of accepting orders to purchase or redeem Fund shares of the applicable Class and the provision of processing and administrative services on behalf of such Class, including, but not limited to: (a) aggregating and processing purchase and redemption requests and placing net purchase and redemption orders with the Fund’s Transfer Agent or distributor; (b) processing dividend payments from the Fund on behalf of shareholders; (c) providing sub-accounting for Fund shares beneficially owned by shareholders or the information necessary for such sub-accounting; (d) transmitting, on behalf of the Fund, proxy statements, shareholder reports, prospectuses, dividend and tax notices and other communications from the Fund; (e) receiving, tabulating and transmitting to the Fund or the Administrator proxies executed by shareholders with respect to shareholder meetings; (f) providing periodic statements showing account balances and, to the extent practicable, integrating such information with other transactions otherwise effected by the Shareholder Servicing Agent; (g) furnishing (either separately or on an integrated basis with other reports sent to an account by a Shareholder Servicing Agent) monthly and annual statements and confirmations of all purchases and redemptions of Fund shares; (h) providing such other similar services as the Trust or the Administrator may request; and (i) providing necessary personnel and facilities to conduct the processing services described above.

4. Authorization of the Administrator: The Board has determined that it is consistent with the best interests of the Fund and appropriate in furtherance of the purposes of this Plan that the Administrator, by operation of this Plan, be authorized as follows:

(a) New Agreements. With respect to new agreements entered into after the date of this Plan, (i) to identify Shareholder Servicing Agents; (ii) to appoint Shareholder Servicing Agents as agents of the Trust for the limited purpose of accepting orders to purchase or redeem Fund shares; (iii) to engage Shareholder Servicing Agents to perform shareholder servicing and processing services by entering into shareholder servicing agreements and processing agreements; (iv) to terminate Shareholder Servicing Agents, pursuant to the terms of

the relevant agreements; and (v) to pay Shareholder Servicing Agents out of the Administrator’s fees the amount due them under the shareholder servicing and processing agreements, subject to compliance by a Shareholder Servicing Agent with the terms of the related agreements between the Shareholder Servicing Agent and the Administrator. Forms of agreement entered into by the Administrator in connection with this Plan will be presented to the Board from time to time, but the Board has determined that the Administrator may enter into agreements with the Shareholder Servicing Agents that differ from those forms in such form or substance as the Administrator deems necessary or appropriate; provided, however, that the Administrator shall not have authority to exceed the maximum fee set by the Board for agreements entered into in connection with this Plan nor to eliminate terms creating third party beneficial or similar rights in favor of the Trust or the Funds.

(b) Existing Agreements. With respect to existing shareholder servicing agreements and processing agreements between a Shareholder Servicing Agent and the Trust, (i) to amend or restate such agreements, or any terms thereof, as the Administrator deems necessary or appropriate; (ii) to terminate such agreements or cause them to be superseded by new agreements in accordance with paragraph 4(a) above; and (iii) to pay the Shareholder Servicing Agents out of the Administrator’s fees the amounts due them under the shareholder servicing and processing agreements between the Shareholder Servicing Agent and the Trust.

5. Fee Calculation: For the purpose of determining the fees payable under this Plan, the value of the net assets of each Fund or Class shall be computed in the manner specified in the Trust’s registration statement on Form N-1A for the computation of the value of the Fund’s net assets.

6. Reports: The Administrator shall provide the Board, at least quarterly, with a written report that includes the names of the firms that serve as Shareholder Servicing Agents pursuant to agreements entered into in connection with this Plan and of all amounts actually expended during the reporting period pursuant to this Plan, expressed both as dollar amounts and percentages. The report shall state the purpose for which the amounts were expended; provided, however, it shall be assumed that the purposes are to compensate Shareholder Servicing Agents for some or all of the services described above in paragraphs 2 and 3. BlackRock Fund Advisors as adviser to the Master Investment Portfolio (“MIP”), shall identify amounts received by the Administrator from the Trust and retained as compensation separately in reports presented to the Board in connection with the annual approval of the MIP advisory agreements.

7. Effectiveness: This Plan will become effective immediately upon approval by a majority of the Board members, including a majority of the Board members who are not “interested persons” (as defined in the Act) of the Trust and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan or on such later date as the Board may designate (the “Effective Date”).

8. Term: This Plan shall continue for a period of one year from its Effective Date, unless earlier terminated in accordance with its terms, and thereafter shall continue automatically for successive annual periods, provided such continuance is approved at least annually in the manner provided in paragraph 7 hereof. This Plan is terminable without penalty at any time by vote of a majority of the Board members who are not “interested persons” (as defined in the Act) of the Trust and have no direct or indirect financial interest in the operation of this Plan or in any agreements entered into in connection with this Plan.

9. Amendments: This Plan may be amended at any time by the Board, provided that any material amendments of the terms of this plan shall become effective only upon approval as provided in paragraph 7 hereof.

10. Limitation of Liability: The obligations hereunder and under any agreement entered into in connection with this Plan shall only be binding upon the assets and property of the relevant Fund, as provided for in the Trust’s Agreement and Declaration of Trust and By-Laws and shall not be binding upon any Trustee, officer or shareholder of the Trust or Fund individually.

SCHEDULE 1

Fees are expressed as a percentage of the average daily net asset value of the Class beneficially owned by or attributable to clients of the Shareholder Servicing Agent.


Fund and Share Classes	Maximum Annual Shareholder Servicing Fee	Maximum Annual Processing Fee
BlackRock Cash Funds: Institutional Trust Class Shares	0.25%	0.13%
BlackRock Cash Funds: Prime Trust Class Shares	0.25%	0.13%
BlackRock Cash Funds: Government Trust Class Shares	0.25%	0.13%
BlackRock Cash Funds: Treasury Trust Class Shares	0.25%	0.13%

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012 and effective July 1, 2012

Schedule I to BlackRock Funds III Third Amended and Restated Shareholder Servicing and Processing Plan

Exhibit 8(f)(1)

ADMINISTRATION AGREEMENT

BlackRock Funds III

July 1, 2012

BlackRock Advisors, LLC

100 Bellevue Parkway

Wilmington, Delaware 19809

Ladies and Gentlemen:

This Administration Agreement, dated July 1, 2012, between BlackRock Funds III (the “ Trust ”) and BlackRock Advisors, LLC (“ BlackRock ”) confirms the agreement between the Trust on behalf of its series listed in the attached Appendix A, as such Appendix may be amended from time to time (collectively, the “ Funds ”), and BlackRock.

The parties agree as follows:

1. Trust . The Trust is a registered open-end, management investment company. The Trust engages in the business of investing and reinvesting the assets of each Fund in the manner and in accordance with the applicable investment objective, policies and restrictions specified in the Trust’s currently effective prospectuses and statements of additional information incorporated therein relating to the Funds and the Trust (such prospectuses and such statements of additional information being collectively referred to as the “ Prospectuses ”) included in the Registration Statement, as amended from time to time. The Funds are feeder funds that invest all of their assets in corresponding master portfolios of other registered investment companies (each a “ Master Portfolio ”) and, accordingly, the Trust has not engaged an adviser to manage the investing and reinvesting of the assets of such Funds.

2. Administrator . The Trust is engaging BlackRock to provide, or cause to be provided, the administrative services specified elsewhere in this Agreement, subject to the overall supervision of the Trust’s Board of Trustees.

3. Administrative Services . BlackRock agrees, at its expense (a) to supervise the administrative operations and undertake to provide, or cause to be provided, the services described on Appendix B, as such Appendix may be amended from time to time by the mutual consent of the parties (the provision of, and liability for, certain of such services to be allocated on such Appendix) in connection with the operations of the Trust and the Funds, including without limitation those functions that the Trust has authorized BlackRock, as its Administrator, to perform pursuant to the applicable Shareholder Servicing Plan, as amended from time to time, and, if applicable, the Shareholder Servicing and Processing Plan, as amended from time to time; (b) to take all reasonable action in the performance of its obligations under this Agreement to assure that the necessary information is made available to other service providers, as such may be required by the Trust from time to time; and (c) to provide all other administrative services reasonably necessary for the operation of the Funds, other than those services that are to be provided by the Trust’s transfer and dividend disbursing agent and custodian.

4. Expenses Borne by Administrator . Except as otherwise provided in this Agreement, BlackRock agrees to bear all costs of the operations of each Fund, including but not limited to governmental fees; interest charges; fees and expenses of its legal counsel (other than as set forth below) and its transfer agent and dividend disbursing agent; fees paid to shareholder servicing, shareholder servicing and processing, and other special purpose agents; expenses of preparing and printing any stock certificates, prospectuses, statements of additional information, shareholders’ reports, notices, proxy statements and reports to regulatory agencies; office supplies; premiums for fidelity bonds and errors and omissions and/or officers and trustees liability insurance; trade association membership dues; pricing services, if any; fees and expenses of any custodian and fund accountant, including those for keeping books and accounts and calculating the net asset value per share in the Funds; expenses of shareholders’ meetings; expenses relating to the issuance, registration, qualification and redemption of shares of the Funds; and organizational expenses. Notwithstanding anything to the contrary in this Agreement (but subject to the proviso to the first sentence of paragraph 5 below), BlackRock shall not be required to bear (a) any portion of brokerage or other expenses connected with the execution of portfolio securities transactions for a Master Portfolio, (b) fees payable to the investment adviser under its advisory contracts with, or on behalf of, a Master Portfolio, (c) any distribution and/or service fees payable as a result of any distribution and service plan adopted by the Board of Trustees pursuant to Rule 12b-1 under the 1940 Act, (d) each Fund’s pro rata portion of the compensation of the Trustees who are not “interested persons” (as defined in the Act) of the Trust (“ Independent Trustees ”), (e) travel expenses of the Independent Trustees in connection with their attendance at Board and other meetings relating to the Trust, (f) fees and expenses of legal counsel for the Independent Trustees, (g) fees and expenses of each Fund’s independent auditors, (h) litigation expenses (including counsel fees and expenses in connection with litigation), (i) taxes (including income, excise, transfer and withholding taxes), or (j) any other cost or expense that a majority of the Independent Trustees deems to be an extraordinary expense.

5. Administration Fees . In consideration of the administration services to be provided by BlackRock under this Agreement, the Trust shall pay BlackRock a monthly fee on behalf of each Fund on the first business day of each month at the applicable annual rates specified as a percentage of daily net assets on Appendix A attached to this Agreement, provided that the amount of the fee payable on behalf of such Fund shall be reduced by an amount equal to the amounts payable by such Fund for expenses described in paragraph 4(d), (e), (1) and (g) above. If the fees payable to BlackRock under this paragraph begin to accrue after the beginning of any month or if this Agreement terminates before the end of any month, the fee for the period from the effective date to the end of the month or from the beginning of the month to the termination date, respectively, shall be prorated according to the proportion that the period bears to the full month in which the effectiveness or termination occurs. For purposes of calculating each such monthly fee, the value of each Fund’s net assets shall be computed in the manner specified in each Fund’s Prospectus, as supplemented from time to time, for the computation of the value of the Fund’s net assets in connection with the determination of the net asset value of a Fund’s shares. For purposes of this Agreement, a “business day” is any day the Fund is open for business.

6. Standard of Care . BlackRock shall exercise reasonable care and shall give the Trust the benefit of its best judgment and efforts in rendering services under this Agreement. As an inducement to BlackRock’s undertaking to render services hereunder, the Trust agrees that BlackRock shall not be liable under this Agreement for any mistake in judgment or in any other event whatsoever, provided that nothing in this Agreement shall be deemed to protect or purport to protect BlackRock against any liability to the Trust or its shareholders to which BlackRock would otherwise be subject by reason of willful misfeasance, bad faith or negligence in the performance of BlackRock’s duties under this Agreement or by reason of reckless disregard of its obligations and duties hereunder.

7. Term, etc. This Agreement shall become effective on its execution date and shall remain in full force and effect for a period of two years or until terminated pursuant to the provisions of this paragraph, and it may be reapproved at least annually thereafter by the Trust’s Board of Trustees, including a majority of the Independent Trustees who are not parties to this Agreement. This Agreement may be terminated at any time without payment of any penalty, upon 60 days’ written notice, by vote of the Board of Trustees of the Trust or by BlackRock. BlackRock will cooperate with and assist the Trust, its agents and any successor administrator or administrators in any substitution/conversion process. This Agreement shall extend to and shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable without the written consent of the other party.

8. Non-Exclusivity . Except to the extent necessary to perform BlackRock’s obligations under this Agreement, nothing herein shall be deemed to limit or restrict the right of BlackRock, or any affiliate or employee of BlackRock, to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, firm, individual or association.

9. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

10. Delegation . The Trust hereby agrees and acknowledges that BlackRock may delegate responsibility for any or all of the services to be provided hereunder to State Street Bank and Trust Company as sub-administrator or to other service providers, provided that BlackRock agrees to remain fully liable to the Trust for the provision of any service that BlackRock delegates to any co-administrator or sub-administrator.

11. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterpart shall, together, constitute only one instrument.

If the foregoing correctly sets forth the agreement between the Trust and BlackRock, please so indicate by signing and returning to the Trust the enclosed copy hereof.


Very truly yours,

BLACKROCK FUNDS III on behalf of the funds listed in Appendix A

By:
Name: Title:


ACCEPTED as of the date set forth above:

BLACKROCK ADVISORS, LLC

By:
Name: Title:

Appendix A

Fees


Funds of the Trust with Class, if applicable		Administration Fee (as % of net assets) ¹
Fund	Class	Total
BlackRock Cash Funds: Institutional	Institutional	0.05
	Capital	0.07
	Premium	0.10
	Select	0.15
	Aon Captives	0.05
	Trust	0.38
	SL Agency	0.02
BlackRock Cash Funds: Prime	Institutional	0.05
	Capital	0.07
	Premium	0.10
	Select	0.15
	Trust	0.38
	SL Agency	0.02
BlackRock Cash Funds: Government	Institutional	0.05
	Capital	0.07
	Premium	0.10
	Select	0.15
	Trust	0.38
	SL Agency	0.02
BlackRock Cash Funds: Treasury	Institutional	0.05
	Capital	0.07
	Premium	0.10
	Select	0.15
	Trust	0.38
	SL Agency	0.02
BlackRock S&P 500 Stock Fund	Institutional Shares	0.18
	Investor A Shares	0.18
	Investor A1 Shares	0.25

Expenses attributable to one or more, but not all, of the Funds or share classes (such as shareholder servicing expenses) shall be charged against the assets of the relevant Funds or share classes. Because of the differences in the expenses attributable to one or more, but not all, of the share classes of a particular Fund, a Fund may have different administration fees for different share classes.

Appendix A to BlackRock Funds III Administration Agreement (Unitary Fee)

A-1


Funds of the Trust with Class, if applicable		Administration Fee (as % of net assets) ¹
Fund	Class	Total
	Investor B Shares	0.29
	Investor C1 Shares	0.29
	Class K Shares	0.11
	Service Shares	0.19
LifePath Retirement Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2020 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2025 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2030 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2035 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2040 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15

Appendix A to BlackRock Funds III Administration Agreement (Unitary Fee)

A-2


Funds of the Trust with Class, if applicable		Administration Fee (as % of net assets) ¹
Fund	Class	Total
LifePath 2045 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2050 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
LifePath 2055 Portfolio	Institutional Shares	0.50
	Investor A Shares	0.50
	Investor C Shares	0.50
	Class R Shares	0.50
	Class K Shares	0.15
BlackRock Bond Index Fund	Institutional Shares	0.17
	Investor A Shares	0.17
	Class K Shares	0.12
BlackRock CoreAlpha Bond Fund	Institutional Shares	0.10
	Investor A Shares	0.20
	Investor C Shares	0.20

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012, as amended May 16, 2012, and effective July 1, 2012

Appendix A to BlackRock Funds III Administration Agreement (Unitary Fee)

A-3

Appendix B


Function	Master	Feeder	BlackRock Advisors, LLC
MANAGEMENT REPORTING & TREASURY ADMINISTRATION
Monitor portfolio compliance in accordance with the current Registration Statement.	X		Continuously monitor portfolio activity and Fund operations in conjunction with 1940 Act, Registration Statement and any other applicable laws and regulations. Monitor results of testing performed by State Street Bank and Trust Company, the successor corporation to Investors Bank & Trust Company as sub-administrator (“ State Street ”) and approve resolution of compliance issues addressed by State Street. Note: All references to State Street relate to activities delegated to State Street.
Provide compliance summary package.	X		Review report prepared by State Street.
Perform asset diversification testing to establish qualification as a MC.	X		Continuously monitor portfolio activity in conjunction with IRS requirements. Review results of State Street testing and take any necessary action. Approve tax positions taken.
Perform qualifying income testing to establish qualification as a RIC.		X	Continuously monitor portfolio activity in conjunction with IRS requirements. Review results of State Street testing and take any necessary action. Approve tax positions taken.
Prepare the Funds’ annual expense budget. Establish daily accruals.	X	X	Provide asset level projections and vendor fee information. Approve expense budget prepared by State Street.

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-1


Function	Master	Feeder	BlackRock Advisors, LLC
Monitor the Funds’ expense budget.	X	X	Provide asset level projections quarterly. Provide vendor information as necessary. Review expense analysis and approve budget revisions prepared by State Street.
Receive and coordinate payment of Fund expenses.	X	X	Approve invoices and allocations of payments. Send invoices to State Street in a timely manner.
Calculate periodic dividend rates to be declared in accordance with management guidelines.		X	Establish and maintain dividend and distribution policies. Approve distribution rates per share and aggregate amounts. Obtain Board approval when required.
Review the Fund’s multi-class dividend calculation procedures. Calculate periodic dividend rates to be declared in accordance with management guidelines.		X	Review and approve dividend calculation methodologies for each class. Approve distribution rates per share and aggregate amounts. Obtain Board approval when required.
Calculate total return information on Funds as defined in the current Registration Statement.		X	Review total return information calculated by State Street.
Calculate gross returns (SEC returns grossed up for expenses)	X		Review gross return information calculated by State Street.
Prepare responses to major industry questionnaires.	X	X	Identify the services to which the Funds report. Provide information as requested.
Prepare Independent Trustee Form 1099- Misc.	X	X	Summarize amounts paid to Independent Trustees during the calendar year. Prepare and mail Form 1099-Misc
FINANCIAL REPORTING
Prepare financial information for presentation to Fund management and Board of Trustees.	X	X	Review financial information prepared by State Street.

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-2


Function	Master	Feeder	BlackRock Advisors, LLC
Coordinate the annual audit and semi-annual preparation and printing of financial statements and notes with management, fund accounting and the Fund auditors.	X	X	Provide past financial statements and other information required to create templates to State Street, including report style and graphics. Approve format and text as standard. Approve production cycle and assist in managing to the cycle. Coordinate review and approval by portfolio managers of portfolio listings to be included in financial statements. Prepare appropriate management letter and coordinate production of Management Discussion and Analysis. Review and approve entire report. Make appropriate representations in conjunction with audit.
LEGAL
Prepare agenda and Board materials for quarterly Board meetings.	X	X	Review and approve Board materials and Board and committee meeting minutes.
Prepare and file Form N-SAR.	X	X	Provide appropriate responses. Review and authorize filing prepared by State Street.
Prepare amendments to Registration Statement.	X	X	Review and approve amendments as prepared and coordinated by State Street.
Prepare Registration Statement supplements.		X	Review and approve Registration Statement supplements, as prepared by State Street.
Preparation and filing of 24f-2 Notice.		X	Review and approve filing, as prepared by State Street.
Proxy Material/Shareholder Meetings	X	X	Review and approve proxy, as prepared by State Street.
Updating of fidelity bond insurance coverage.	X	X	Obtain required fidelity bond insurance coverage. Monitor level of fidelity bond insurance maintained in accordance with required coverage.

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-3


Function	Master	Feeder	BlackRock Advisors, LLC
Respond to regulatory audits.	X	X	Coordinate with regulatory authorities to provide requested documentation and resolutions to inquiries.
Maintain and preserve the “corporate” records of each Trust, including each Fund and Master Portfolio.	X	X	Delegated to State Street.
BLUE SKY
Maintain effective Blue Sky notification filings for states in which Fund management intends to solicit sales of Fund shares.		X	Identify states in which filings are to be made. Identify exempt transactions to transfer agent for appropriate exclusion from blue sky reporting.
File amendments to Registration Statement with the applicable state securities commissions in coordination with SEC filing, if required.		X	Inform State Street of filings prior to SEC filing.
TAX
Prepare income tax provisions.	X	X	Provide transaction information as requested by State Street. Identify Passive Foreign Investment Companies (PFICs). Approve tax accounting positions to be taken. Approve provisions.
Calculate excise tax distributions	X	X	Provide transaction information as requested as requested by State Street. Identify PFICs. Approve tax accounting positions to be taken. Review and approve all income and distribution calculations, including projected income and dividend shares. Approve distribution rates per share and aggregate amounts. Obtain Board approval when required.
Prepare tax returns	X	X	Review and sign tax return prepared by State Street.

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-4


Function	Master	Feeder	BlackRock Advisors, LLC
Prepare Form 1099		X	Review and approve information provided for Form 1099 by State Street.
Prepare other year-end tax-related disclosures		X	Review and approve information provided by State Street.
ACTIVITIES IN CONNECTION WITH SHAREHOLDER SERVICING AND PROCESSING
Engage Agents		X	Identifying, appointing, engaging, terminating and paying Agents
Perform Servicing and Processing Functions		X	Performing functions not assumed by Agents or delegated to State Street
Supervise Agents		X	Review reports from Agents and State Street
Report		X	Compile Board report with names of Agents and expenditures, as contemplated by Feeder’s Shareholder Servicing Plan and Shareholder Servicing and Processing Plan
ACTIVITIES IN CONNECTION WITH SUPPORTING FEEDERS
Record investments in each Master Portfolio	X		Maintain an inventory and record of investment in, and withdrawals from, the Master Portfolio by each Feeder and provide information or assistance reasonably required to reconcile such inventory and record with the books and records of the Feeder
Provide information in connection with tax distributions	X		Provide any information or assistance reasonably required to calculate tax distributions for the Feeders

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-5


Function	Master	Feeder	BlackRock Advisors, LLC
Maintain and provide other books and records	X		Maintain, prepare or provide such other records relating to investments by a Feeder in its corresponding Master Portfolio which may be reasonably required in connection with reports relating to the Feeder or the Master Portfolio to regulatory authorities
Report	X		Prepare and provide information reporting relating to the performance or holdings of the Master Portfolio as may reasonably requested in order to provide information to shareholders of the Feeders

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-6

Function

Master

Feeder

BlackRock Advisors, LLC

Provide additional administrative support

Upon reasonable request

• Prepare reports or other information relating to each Feeder’s investment in its corresponding Master Portfolio to be provided to third-party reporting services

• Use best efforts to require each Master Portfolio’s independent public auditors to provide the party Feeder’s independent public auditors with assistance or cooperation

• Attend Feeder Board meetings and assist in preparing reports to such Board (or answering questions in connection therewith)

• Provide information regarding the Master Portfolios and their compliance policies and procedures (to the extent available) that is necessary in connection with the Feeders’ compliance policies and procedures

• provide assistance in connection with responding to regulatory inquiries

Appendix B to BlackRock Funds III Administration Agreement (Unitary Fee)

B-7

Exhibit 8(f)(2)

ADMINISTRATION AGREEMENT

AGREEMENT, dated July 1, 2012, between BlackRock Funds III (the “Fund”), a Delaware business trust, on behalf of itself and each of its series listed on Exhibit A (each a “Portfolio” and together the “Portfolios”), and BlackRock Advisors, LLC (the “Administrator”), a Delaware limited liability company.

WHEREAS, the Administrator has agreed to furnish administration services to the Fund, an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and each Portfolio;

WHEREAS, the Board of Trustees of the Fund has established and designated each Portfolio as a series of the Fund;

WHEREAS, each Portfolio is a “feeder” fund that invest all of its assets in a portfolio of Master Investment Portfolio, which portfolio serves as the “master” portfolio and has the same investment objective and policies as the corresponding Portfolio;

WHEREAS, this Agreement has been approved in accordance with the provisions of the 1940 Act, and the Administrator is willing to furnish such services upon the terms and conditions herein set forth;

NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, it is agreed by and between the parties hereto as follows:

1. In General . The Administrator agrees, all as more fully set forth herein, to act as administrator to the Portfolios and to supervise and arrange for the day-to-day operations of each Portfolio.

2. Duties and Obligations of Administrator with Respect to the Administration of the Portfolios . The Administrator agrees to furnish office facilities and equipment and clerical, bookkeeping and administrative services (other than such services, if any, provided by the Fund’s custodian, transfer agent and dividend disbursing agent and other service providers) for the Portfolios. To the extent requested by the Fund on behalf of the Portfolios, the Administrator agrees to provide the following administrative services:

(a) Oversee the determination and publication of each Portfolio’s net asset value in accordance with the Portfolios’ policy as adopted from time to time by the Board of Trustees;

(b) Oversee the maintenance by the Fund’s custodian and transfer agent and dividend disbursing agent of certain books and records of the Portfolios as required under Rule 31a-1(b)(4) of the 1940 Act and maintain (or oversee maintenance by such other persons as

approved by the Board of Trustees) such other books and records required by law or for the proper operation of the Portfolios;

(c) Oversee the preparation and filing of each Portfolio’s federal, state and local income tax returns and any other required tax returns;

(d) Review the appropriateness of and arrange for payment of each Portfolio’s expenses;

(e) Prepare for review and approval by officers of the Fund financial information for the Portfolio’s semiannual and annual reports, proxy statements and other communications with shareholders required or otherwise to be sent to Portfolio shareholders, and arrange for the printing and dissemination of such reports and communications to shareholders;

(f) Prepare for review by an officer of the Fund the Portfolio’s periodic financial reports required to be filed with the Securities and Exchange Commission (“SEC”) on Form N-SAR, Form N-CSR, Form N-PX, Form N-Q, and such other reports, forms and filings, as may be mutually agreed upon;

(g) Prepare such reports relating to the business and affairs of the Portfolios as may be mutually agreed upon and not otherwise appropriately prepared by the Fund’s custodian, counsel or auditors;

(h) Make such reports and recommendations to the Board of Trustees concerning the performance of the independent accountants as the Board of Trustees may reasonably request or deems appropriate;

(i) Make such reports and recommendations to the Board of Trustees concerning the performance and fees of the Fund’s custodian and transfer and dividend disbursing agent as the Board of Trustees may reasonably request or deems appropriate;

(j) Oversee and review calculations of fees paid to the Fund’s service providers;

(k) Oversee the Portfolio’s portfolio and perform necessary calculations as required under Section 18 of the 1940 Act;

(l) Consult with the Fund’s officers, independent accountants, legal counsel, custodian, accounting agent and transfer and dividend disbursing agent in establishing the accounting policies of the Portfolios and monitor financial and shareholder accounting services;

(m) Determine the amounts available for distribution as dividends and distributions to be paid by each Portfolio to its shareholders; prepare and arrange for the printing of dividend notices to shareholders; and provide the Fund’s dividend disbursing agent and custodian with such information as is required for such parties to effect the payment of dividends and distributions and to implement the Fund’s dividend reinvestment plan;

(n) Prepare such information and reports as may be required by any banks from which a Portfolio borrows funds;

(o) Provide such assistance to the custodian and the Fund’s counsel and auditors as generally may be required to properly carry on the business and operations of the Portfolios;

(p) Respond to or refer to the Fund’s officers or transfer agent, shareholder (including any potential shareholder) inquiries relating to the Portfolios; and

(q) Supervise any other aspects of the Portfolios’ administration as may be agreed to by the Fund and the Administrator.

All services are to be furnished through the medium of any Trustees, officers or employees of the Administrator or its affiliates as the Administrator deems appropriate in order to fulfill its obligations hereunder.

The Portfolios will reimburse the Administrator or its affiliates for all out of pocket expenses incurred by them in connection with the performance of the administrative services described in this paragraph 2. The Portfolios will reimburse the Administrator and its affiliates for their costs in providing accounting services to the Portfolios.

3. Covenants . (a) In the performance of its duties under this Agreement, the Administrator shall at all times conform to, and act in accordance with, any requirements imposed by: (i) the provisions of the 1940 Act and the Investment Advisers Act of 1940, as amended, and all applicable Rules and Regulations of the SEC; (ii) any other applicable provision of law; (iii) the provisions of the Charter and By-Laws of the Fund, as such documents are amended from time to time; (iv) the investment objectives and policies of the Portfolios as set forth in the Fund’s Registration Statement on Form N- 1A and/or the resolutions of the Board of Trustees; and (v) any policies and determinations of the Board of Trustees of the Fund.

(b) The Administrator will treat confidentially and as proprietary information of each Portfolio all records and other information relative to that Portfolio, and the Portfolio’s prior, current or potential shareholders, and will not use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Administrator may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.

4. Services Not Exclusive . Nothing in this Agreement shall prevent the Administrator or any officer, employee or other affiliate thereof from acting as administrator for any other person, firm or fund, or from engaging in any other lawful activity, and shall not in any way limit or restrict the Administrator or any of its officers, employees or agents from buying, selling or trading any securities for its or their own accounts or for the accounts of others for

whom it or they may be acting; provided, however, that the Administrator will undertake no activities which, in its judgment, will adversely affect the performance of its obligations under this Agreement.

5. Books and Records . In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Administrator hereby agrees that all records which it maintains for the Fund and the Portfolios are the property of the Fund and further agrees to surrender promptly to the Fund any such records upon the Fund’s request. The Administrator further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.

6. Expenses . During the term of this Agreement, the Administrator will bear all costs and expenses of its employees and any overhead incurred in connection with its duties hereunder and shall bear the costs of any salaries or Trustees’ fees of any officers or Trustees of the Fund who are affiliated persons (as defined in the 1940 Act) of the Administrator; provided that the Board of Trustees of the Fund may approve reimbursement to the Administrator of the pro rata portion of the salaries, bonuses, health insurance, retirement benefits and all similar employment costs for the time spent on Portfolio operations, (including, without limitation, compliance matters) (other than the provision of administrative services required to be provided hereunder) of all personnel employed by the Administrator who devote substantial time to Portfolio operations or the operations of other investment companies administered by the Administrator.

7. Compensation of the Administrator . (a) The Fund agrees to pay to the Administrator and the Administrator agrees to accept as full compensation for all services rendered by the Administrator as such, a monthly fee (the “Administration Fee”) in arrears at an annual rate equal to the amount set forth in Schedule A hereto of the average daily value of each Portfolio’s Net Assets. “Net Assets” means the total assets of a Portfolio minus the sum of the accrued liabilities. For any period less than a month during which this Agreement is in effect, the fee shall be prorated according to the proportion which such period bears to a full month of 28, 29, 30 or 31 days, as the case may be.

(b) For purposes of this Agreement, the Net Assets of the Portfolios shall be calculated pursuant to the procedures adopted by resolutions of the Trustees of the Fund for calculating the value of the Portfolios’ assets or delegating such calculations to third parties.

8. Indemnity . (a) The Fund may, in the discretion of the Board of Trustees of the Fund, indemnify the Administrator, and each of the Administrator’s directors, officers, employees, agents, associates and controlling persons and the directors, partners, members, officers, employees and agents thereof (including any individual who serves at the Administrator’s request as director, officer, partner, member, trustee or the like of another entity) (each such person being an “Indemnitee”) against any liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees (all as provided in accordance with applicable state law) reasonably incurred by such Indemnitee in connection with the defense or disposition of any action, suit or other proceeding,

whether civil or criminal, before any court or administrative or investigative body in which such Indemnitee may be or may have been involved as a party or otherwise or with which such Indemnitee may be or may have been threatened, while acting in any capacity set forth herein or thereafter by reason of such Indemnitee having acted in any such capacity, except with respect to any matter as to which such Indemnitee shall have been adjudicated not to have acted in good faith in the reasonable belief that such Indemnitee’s action was in the best interest of the Fund and furthermore, in the case of any criminal proceeding, so long as such Indemnitee had no reasonable cause to believe that the conduct was unlawful; provided, however, that (1) no Indemnitee shall be indemnified hereunder against any liability to the Fund or its shareholders or any expense of such Indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties involved in the conduct of such Indemnitee’s position (the conduct referred to in such clauses (i) through (iv) being sometimes referred to herein as “disabling conduct”), (2) as to any matter disposed of by settlement or a compromise payment by such Indemnitee, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless there has been a determination that such settlement or compromise is in the best interests of the Fund and that such Indemnitee appears to have acted in good faith in the reasonable belief that such Indemnitee’s action was in the best interest of the Fund and did not involve disabling conduct by such Indemnitee and (3) with respect to any action, suit or other proceeding voluntarily prosecuted by any Indemnitee as plaintiff, indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding by such Indemnitee was authorized by a majority of the full Board of Trustees of the Fund.

(b) The Fund may make advance payments in connection with the expenses of defending any action with respect to which indemnification might be sought thereunder if the Fund receives a written affirmation of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification has been met and a written undertaking to reimburse the Fund unless it is subsequently determined that such Indemnitee is entitled to such indemnification and if the Trustees of the Fund determine that the facts then known to them would not preclude indemnification. In addition, at least one of the following conditions must be met: (A) the Indemnitee shall provide security for such Indemnitee’s undertaking, (B) the Fund shall be insured against losses arising by reason of any unlawful advance, or (C) a majority of a quorum consisting of Trustees of the Fund who are neither “interested persons” of the Fund (as defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding (“Disinterested Non Party Trustees”) or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts (as opposed to a full trial type inquiry), that there is reason to believe that the Indemnitee ultimately will be found entitled to indemnification.

(c) All determinations with respect to the standards for indemnification hereunder shall be made (1) by a final decision on the merits by a court or other body before whom the proceeding was brought that such Indemnitee is not liable or is not liable by reason of disabling conduct, or (2) in the absence of such a decision, by (i) a majority vote of a quorum of the Disinterested Non Party Trustees of the Fund, or (ii) if such a quorum is not obtainable or, even if obtainable, if a majority vote of such quorum so directs, independent legal counsel in a written opinion. All determinations that advance payments in connection with the expense of

defending any proceeding shall be authorized and shall be made in accordance with the immediately preceding clause (2) above.

The rights accruing to any Indemnitee under these provisions shall not exclude any other right to which such Indemnitee may be lawfully entitled.

9. Limitation on Liability . The Administrator will not be liable for any error of judgment or mistake of law or for any loss suffered by Administrator or by the Portfolios in connection with the performance of this Agreement, except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its duties under this Agreement. As used in this Section 9, the term “Administrator” shall include any affiliates of the Administrator performing services for the Fund contemplated hereby and partners, Directors, officers and employees of the Administrator and of such affiliates.

10. Duration and Termination . This Agreement shall become effective as of the date hereof and, unless sooner terminated with respect to the Portfolios as provided herein, shall continue in effect for a period of two years. Thereafter, if not terminated, this Agreement shall continue in effect with respect to the Portfolios for successive periods of 12 months, provided such continuance is specifically approved at least annually by both (a) the vote of a majority of the Fund’s Board of Trustees or the vote of a majority of the outstanding voting securities of each Portfolio at the time outstanding and entitled to vote, and (b) by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of any party to this Agreement, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this Agreement may be terminated by the Fund at any time, without the payment of any penalty, upon giving the Administrator 60 days’ notice (which notice may be waived by the Administrator), provided that such termination by the Fund shall be directed or approved by the vote of a majority of the Trustees of the Fund in office at the time or by the vote of the holders of a majority of the voting securities of each Portfolio at the time outstanding and entitled to vote, or by the Administrator on 60 days’ written notice (which notice may be waived by the Fund). This Agreement will also immediately terminate in the event of its assignment. (As used in this Agreement, the terms “majority of the outstanding voting securities,” “interested person” and “assignment” shall have the same meanings of such terms in the 1940 Act.)

11. Notices . Any notice under this Agreement shall be in writing to the other party at such address as the other party may designate from time to time for the receipt of such notice and shall be deemed to be received on the earlier of the date actually received or on the fourth day after the postmark if such notice is mailed first class postage prepaid.

12. Amendment of this Agreement . This Agreement may be amended by the parties only if such amendment is specifically approved by the vote of the Board of Trustees of the Fund, including a majority of those Trustees who are not parties to this Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval and, where required by the 1940 Act, by a vote of a majority of the outstanding voting securities of each Portfolio.

13. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York for contracts to be performed entirely therein without reference to choice of law principles thereof and in accordance with the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of New York, or any of the provisions, conflict with the applicable provisions of the 1940 Act, the latter shall control.

14. Use of the Name BlackRock . The Administrator has consented to the use by the Fund of the name or identifying word “BlackRock” in the name of the Fund and each Portfolio. Such consent is conditioned upon the employment of the Administrator as the Administrator to the Fund. The name or identifying word “BlackRock” may be used from time to time in other connections and for other purposes by the Administrator and any of its affiliates. The Administrator may require the Fund to cease using “BlackRock” in the name of the Fund and the Portfolios if the Fund ceases to employ, for any reason, the Administrator, any successor thereto or any affiliate thereof as Administrator of the Fund.

15. Miscellaneous . The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on, and shall inure to the benefit of the parties hereto and their respective successors.

16. Counterparts . This Agreement may be executed in counterparts by the parties hereto, each of which shall constitute an original counterpart, and all of which, together, shall constitute one Agreement.

IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by their duly authorized officers, all as of the day and the year first above written.


BLACKROCK FUNDS III

By:
		Name:
		Title:

BLACKROCK ADVISORS , LLC

By:
		Name:
		Title:

Schedule A

Administration Fee


Funds of the Trust		Administration Fee (as % of average daily net assets)
LifePath Index Retirement Portfolio		0.03
LifePath Index 2020 Portfolio		0.03
LifePath Index 2025 Portfolio		0.03
LifePath Index 2030 Portfolio		0.03
LifePath Index 2035 Portfolio		0.03
LifePath Index 2040 Portfolio		0.03
LifePath Index 2045 Portfolio		0.03
LifePath Index 2050 Portfolio		0.03
LifePath Index 2055 Portfolio		0.03
BlackRock Russell 1000 Index Fund		0.08
BlackRock ACWI ex-US Index Fund		0.10

Exhibit A

BlackRock Russell 1000 Index Fund

BlackRock ACWI ex-US Index Fund

LifePath ^® Index Retirement Portfolio

LifePath ^® Index 2020 Portfolio

LifePath ^® Index 2025 Portfolio

LifePath ^® Index 2030 Portfolio

LifePath ^® Index 2035 Portfolio

LifePath ^® Index 2040 Portfolio

LifePath ^® Index 2045 Portfolio

LifePath ^® Index 2050 Portfolio

LifePath ^® Index 2055 Portfolio

Approved: April 17, 2012 and effective July 1, 2012

Exhibit 8(g)

MASTER ADMINISTRATION FEE WAIVER AGREEMENT

BLACKROCK FUNDS III

This MASTER ADMINISTRATION FEE WAIVER AGREEMENT (this “ Agreement ”) is made effective as of the 1 ^st day of July, 2012, by and between BlackRock Advisors, LLC (the “ Administrator ”) and BlackRock Funds III (the “Trust”), on behalf of each of its series from time to time set forth in Schedule A attached hereto (each, a “ Fund ”).

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the “ 1940 Act ”), as an open-end management company, and is organized as a statutory trust under the laws of the State of Delaware, and each Fund is a series of the Trust;

WHEREAS, the Administrator and the Trust, on behalf of each Fund, are parties to an Administration Agreement (the “ Administration Agreement ”), pursuant to which the Administrator provides administration services, for each Fund, including assuming certain expenses, in consideration of compensation based on the value of the average daily net assets of such Fund (the “ Administration Fee ”); and

WHEREAS, the Administrator has [voluntarily] determined that it is appropriate and in the best interests of the Funds (or certain classes of such Funds) and the shareholders of such Funds (or classes thereof) to waive a part of the Administration Fee with respect to each such Fund or class as set forth in Schedule A attached hereto (the “ Fee Waiver ”). The Trust, on behalf of each such Fund, and the Administrator, therefore, have entered into this Agreement in order to effect the Fee Waiver for each such Fund (or class) at the level specified in Schedule A attached hereto on the terms and conditions set forth in this Agreement;

NOW THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

1. Contractual Fee Waiver . During the Term (as defined in Section 3 below), the Administrator shall waive a portion of its Administration Fee with respect to each Fund (or class thereof) as set forth in Schedule A attached hereto.

2. Voluntary Fee Waiver/Expense Reimbursement . Nothing herein shall preclude the Administrator from either voluntarily waiving administration fees it is entitled to from any series of the Trust (or any class of such series) or voluntarily reimbursing expenses of any series of the Trust (or any class of such series), including the Funds (and the classes) set forth in Schedule A, as the Administrator in its discretion deems reasonable or appropriate. Any such voluntary waiver or voluntary expense reimbursement may be modified or terminated by the Administrator at any time in its sole and absolute discretion without the approval of the Trust’s Board of Trustees.

3. Term; Termination .

3.1 Term . The term (“ Term ”) of the Fee Waiver with respect to a Fund (or class thereof) shall begin on the date hereof (or the date on which a Fund (or class thereof) is added to Schedule A, if later) and end after the close of business on April 30 ^th of the immediately succeeding calendar year (or such other date specified on Schedule A or as agreed to in writing between the Administrator and the Trust with respect to a Fund) unless the Fee Waiver is earlier terminated in accordance with Section 3.2. The Term of the Fee Waiver with respect to a Fund (or class thereof) may be continued from year to year thereafter provided that each such continuance is specifically approved by the Administrator and the Trust with respect to such Fund (or class thereof). Neither the Administrator nor the Trust shall be obligated to extend the Fee Waiver with respect to any Fund (or class thereof).

3.2 Termination . The Fee Waiver with respect to a Fund (or class thereof) shall terminate upon:

(i)

the close of business of the first April 30 ^th after the failure of such Fee Waiver to be continued in accordance with Section 3.1 or such other date specified on Schedule A;

(ii)

the termination of such Fund’s Administration Agreement, unless otherwise agreed by the Administrator and the Trust;

(iii)

a reduction in the rate at which the Administrator is compensated with respect to the Fund (or class thereof) under the Administration Agreement, unless otherwise agreed by the Administrator; or

(iv)

a writing duly executed by the Administrator and the Trust with respect to such Fund (or class thereof) terminating the Fee Waiver.

4. Miscellaneous .

4.1 Captions . The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

4.2 Interpretation . Nothing herein contained shall be deemed to require the Trust to take any action contrary to the Trust’s Declaration of Trust or Bylaws, or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Trust’s Board of Trustees of its responsibility for and control of the conduct of the affairs of the Trust.

4.3 Limitation of Liability . The obligations and expenses incurred, contracted for or otherwise existing with respect to a Fund shall be enforced against the assets of such Fund or applicable class thereof and not against the assets of any other class or any other Fund or series of the Trust. It is understood and expressly stipulated that neither the shareholders of a Fund nor the Trustees of the Trust shall be personally liable hereunder.

4.4 Definitions . Any question of interpretation of any term or provision of this Agreement, including but not limited to the computations of average daily net assets or of any Administration Fee, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of any Administration Agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to such Administration Agreement or the 1940 Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such Court, by rules, regulations or orders of the Securities and Exchange Commission (“ SEC ”) issued pursuant to the 1940 Act. In addition, if the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is revised by rule, regulation or order of the SEC, that provision will be deemed to incorporate the effect of that rule, regulation or order. Otherwise the provisions of this Agreement will be interpreted in accordance with the substantive laws of the State of California.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers as of the day and year first above written.


BLACKROCK FUNDS III on behalf of each FUND

By:
Title:

BLACKROCK ADVISORS, LLC

By:
Title:

BLACKROCK FUNDS III

MASTER ADMINISTRATION FEE WAIVER AGREEMENT

SCHEDULE A

List of Funds

(all percentages are expressed as a percentage of average daily net assets)


Fund	Class	Contractual Administration Fee	Administration Fee Waiver	Net Administration Fee After Waiver
BlackRock Cash Funds: Institutional	Select	0.15%	0.02%	0.13%
BlackRock Cash Funds: Prime	Select	0.15%	0.02%	0.13%
BlackRock Cash Funds: Government	Select	0.15%	0.02%	0.13%
BlackRock Cash Funds: Treasury	Select	0.15%	0.02%	0.13%

Approved by the Board of Trustees of BlackRock Funds III on April 17, 2012 and effective July 1, 2012

[Schedule A to BlackRock Funds III Administration Fee Waiver Agreement]

Exhibit 8(t)

BLACKROCK FUNDS III

MASTER INVESTMENT PORTFOLIOS

Amended and Restated Independent Expense Reimbursement Agreement

This Amended and Restated Independent Expense Reimbursement Agreement (this “ Agreement ”) is entered into as of July 1, 2012 by and among Master Investment Portfolio (“ MIP ”), BlackRock Funds III (the “ Trust ”), BlackRock Fund Advisors (“ BFA ”) and BlackRock Advisors, LLC (“ BAL ”). This Agreement serves to amend and restate the Independent Expense Reimbursement Agreement entered into as of November 13, 2009 by and among MIP, the Trust, BFA (formerly Barclays Global Fund Advisors) and BlackRock Institutional Trust Company, N.A. (formerly Barclays Global Investors, N.A.) (“BTC”) in order to reflect the replacement of BTC by BAL as administrator to MIP and the Trust.

Reference is made to the Administration Agreement between the Trust and BAL dated as of July 1, 2012 with respect to certain of its series listed on Schedule A hereto (the “ Trust Administration Agreement ”) and the Administration Agreement between MIP and BAL dated as of July 1, 2012 with respect to certain of its series listed on Schedule B hereto (the “ MIP Administration Agreement ” referred to together with the Trust Administration Agreement as the “ Administration Agreements ”), pursuant to which BAL serves as Administrator for the Trust and MIP. In addition, BFA and MIP, on behalf of the series of MIP, are parties to investment advisory agreements (the “ Advisory Agreements ”), pursuant to which BFA provides investment advisory services to such series and receives compensation for such services at the rates set forth in the Advisory Agreements (each, an “ Advisory Fee ”) .

Under the Administration Agreements, BAL is not required to bear the cost of (1) the compensation of the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of MIP or the Trust (“ Independent Trustees ”), (2) travel expenses of the Independent Trustees in connection with their attendance at board and other meetings relating to MIP or the Trust, as applicable, (3) fees and expenses of legal counsel for the Independent Trustees, and (4) fees and expenses of the independent auditors of the Trust and MIP (collectively, the “ Independent Expenses ”).

Notwithstanding the Trust Administration Agreement, BAL hereby agrees to reimburse, or provide an offsetting credit against fees it is entitled to receive from, the Trust in an amount equal to the Independent Expenses.

Notwithstanding the MIP Administration Agreement, for those series of MIP that pay an administration fee to BAL under the MIP Administration Agreement, BAL hereby agrees to reimburse, or provide an offsetting credit against fees it is entitled to receive from, those series of MIP in an amount equal to the Independent Expenses allocable to those series.

In addition, for those series of MIP that do not pay an administration fee to BAL under the MIP Administration Agreement, BFA agrees to cap the expenses of such series at the rate at which those series of MIP pay an Advisory Fee to BFA.

This Agreement is effective as of July 1, 2012 and shall remain in effect until after the close of business on April 30, 2013, unless earlier terminated or superseded by the written agreement of (a) MIP and BFA with respect to MIP’s Independent Expenses, or (b) the Trust and BAL with respect to the Trust’s Independent Expenses. The term of this Agreement may be continued from year to year thereafter provided that each such continuance is specifically approved by MIP, the Trust, BFA and BAL. None of MIP, the Trust, BFA or BAL shall be obligated to extend the term of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective officers as of the day and year first above written.


BLACKROCK FUND ADVISORS

By:
Title:

BLACKROCK ADVISORS, LLC

By:
Title:

BLACKROCK FUNDS III on behalf itself and its series listed on Schedule A

By:
Title:

MASTER INVESTMENT PORTFOLIO on behalf of itself and its series listed on Schedule B

By:
Title:

Schedule A

BlackRock Cash Funds: Institutional

BlackRock Cash Funds: Prime

BlackRock Cash Funds: Government

BlackRock Cash Funds: Treasury

LifePath Retirement Portfolio

LifePath 2020 Portfolio

LifePath 2025 Portfolio

LifePath 2030 Portfolio

LifePath 2035 Portfolio

LifePath 2040 Portfolio

LifePath 2045 Portfolio

LifePath 2050 Portfolio

LifePath 2055 Portfolio

BlackRock CoreAlpha Bond Fund

BlackRock Bond Index Fund

BlackRock S&P 500 Stock Fund

(Schedule A to the Amended and Restated Independent Expense Reimbursement Agreement)

Schedule B

Money Market Master Portfolio

Institutional Market Master Portfolio

Government Market Master Portfolio

Treasury Market Master Portfolio

LifePath Retirement Master Portfolio

LifePath 2020 Master Portfolio

LifePath 2025 Master Portfolio

LifePath 2030 Master Portfolio

LifePath 2035 Master Portfolio

LifePath 2040 Master Portfolio

LifePath 2045 Master Portfolio

LifePath 2050 Master Portfolio

LifePath 2055 Master Portfolio

Active Stock Master Portfolio

Bond Index Master Portfolio

CoreAlpha Bond Index Master Portfolio

S&P 500 Stock Master Portfolio

(Schedule B to the Amended and Restated Expense Reimbursement Agreement)

Exhibit 8(u)

TRANSFER AGENCY AGREEMENT

This TRANSFER AGENCY AGREEMENT (“Agreement”) is made as of March 29, 2010 by and between PNC GLOBAL INVESTMENT SERVICING (U.S.) INC., a Massachusetts corporation (“PNC”), and BlackRock Funds III, a Massachusetts business trust (the “Fund”).

WITNESSETH:

WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, the Fund wishes to retain PNC to serve as transfer agent, registrar, dividend disbursing agent and shareholder servicing agent to its investment portfolios listed on Exhibit A attached hereto and made a part hereof, as such Exhibit A may be amended from time to time (each a “Portfolio”), and PNC wishes to furnish such services as more fully described herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1.	Definitions . As Used in this Agreement:

(a)	“ 1933 Act ” means the Securities Act of 1933, as amended.

(b)	“ 1934 Act ” means the Securities Exchange Act of 1934, as amended.

(c)

“ Authorized Person ” means any officer of the Fund and any other person duly authorized by the Fund to give Oral Instructions or Written Instructions on behalf of the Fund. An Authorized Person’s scope of authority may be limited by setting forth such limitation in a written document signed by both parties hereto.

(d)	“ CEA ” means the Commodities Exchange Act, as amended.

(e)

“ Oral Instructions ” means oral instructions addressed to PNC and received by PNC from an Authorized Person or from a person reasonably believed by PNC to be an Authorized Person. PNC may, in its sole discretion in each separate instance, consider and rely upon instructions it receives from an Authorized Person via electronic mail as Oral Instructions.

(f)	“ SEC ” means the Securities and Exchange Commission.

(g)	“ Securities Laws ” means the 1933 Act, the 1934 Act, the 1940 Act and the CEA.

(h)	“ Shares ” means the shares of beneficial interest of any series or class of the Fund.

(i)	“ Written Instructions ” means (i) written instructions signed by an Authorized Person (or a person reasonably believed by PNC to be an Authorized Person) and addressed to and

received by PNC or (ii) trade instructions transmitted to and received by PNC by means of an electronic transaction reporting system which requires use of a password or other authorized identifier in order to gain access. Written Instructions may be delivered by hand, mail, tested telegram, cable, telex, facsimile sending device or as set forth in sub-item (ii) above.

2.	Appointment . The Fund hereby appoints PNC to serve as transfer agent, registrar, dividend disbursing agent and shareholder servicing agent to the Fund in accordance with the terms set forth in this Agreement. PNC accepts such appointment and agrees to furnish such services.

Compliance with Laws . In performing its duties as described herein, PNC will (i) act in a manner not inconsistent with the Fund’s most recent Prospectuses and Statements of Additional Information and all amendments and supplements thereto (as presently in effect and as from time to time amended and supplemented) and resolutions of the Fund’s Board of Trustees of which PNC is informed by the Fund and (ii) comply with all applicable requirements of the Securities Laws and of any other laws, rules and regulations of governmental authorities having jurisdiction with respect to the duties to be performed by PNC hereunder. Except as specifically set forth herein, PNC assumes no responsibility for compliance by the Fund or any other entity.

4.	Instructions .

(a)	Unless otherwise provided in this Agreement, PNC shall act only upon Oral Instructions or Written Instructions.

(b)	PNC shall be entitled to reasonably rely upon any Oral Instruction or Written Instruction it receives pursuant to this Agreement.

(c)

The Fund agrees to forward to PNC Written Instructions confirming Oral Instructions so that PNC receives the Written Instructions by the close of business on the same day that such Oral Instructions are received. The fact that such confirming Written Instructions are not received by PNC or differ from the Oral Instructions shall in no way invalidate the transactions or enforceability of the transactions authorized by the Oral Instructions or PNC’s ability to rely upon such Oral Instructions.

5.	Right to Receive Advice .

(a)	Advice of the Fund . If PNC is in doubt as to any action it should or should not take, PNC may request directions or advice, including Oral Instructions or Written Instructions, from or on behalf of the Fund.

(b)	Advice of Counsel . If PNC shall be in doubt as to any question of law pertaining to any action it should or should not take, PNC may request advice at its own cost from counsel of its own choosing (who may be counsel for the Fund, the Fund’s investment adviser or PNC, at the option of PNC).

Conflicting Advice . In the event of a conflict between directions or advice or Oral Instructions or Written Instructions PNC receives from or on behalf of the Fund, and the advice it receives from counsel pursuant to Section 5(b), PNC may rely upon and follow the advice of counsel.

(c)

Protection of PNC . PNC shall be indemnified by the Fund and without liability for any action PNC takes or does not take in reasonable reliance upon directions or advice or Oral Instructions or Written Instructions PNC receives from or on behalf of the Fund or from counsel pursuant to paragraph (b) of this Section 5 and which PNC believes, in good faith, to be consistent with those directions or advice or Oral Instructions or Written Instructions. Nothing in this Section 5 shall be construed so as to impose an obligation upon PNC to seek such directions or advice or Oral Instructions or Written Instructions.

Books and Records . The books and records pertaining to the Fund, which are in the possession or under the control of PNC, shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable securities laws, rules and regulations. Such books and records shall, to the extent practicable, be maintained separately for each Portfolio of the Fund. The Fund, Authorized Persons and the Fund’s authorized representatives shall have access to such books and records at all times during PNC’s normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by PNC to the Fund or to an authorized representative of the Fund, at the Fund’s expense.

7.	Confidentiality .

(a)

Each party shall keep confidential any information relating to the other party’s business (“Confidential Information”) and neither party shall use the other party’s Confidential Information for any purpose other than in connection with the performance of this Agreement. Confidential Information shall include:

(i)

any data or information that is competitively sensitive material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of the Fund or PNC;

(ii)

any scientific or technical information, design, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords the Fund or PNC a competitive advantage over its competitors;

(iii)

all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and

(iv)

anything designated as confidential.

(b)	Notwithstanding the foregoing, information shall not be subject to the foregoing obligations set forth in this Section 7 if:

(i)

it was already known to the receiving party at the time it was obtained;

(ii)

it is or becomes publicly known or available through no wrongful act of the receiving party;

(iii)

it was rightfully received from a third party who, to the best of the receiving party’s knowledge, was not under a duty of confidentiality;

(iv)

it is released by the protected party to a third party without restriction;

(v)

it is requested or required to be disclosed by the receiving party pursuant to a court order, subpoena, governmental or regulatory agency request or law (provided the receiving party will provide the other party written notice of the same, to the extent such notice is permitted);

(vi)

release of such information by PNC is necessary in connection with the provision of services under this Agreement;

(vii)

it is relevant to the defense of any claim or cause of action asserted against the receiving party;

(viii)

it is Fund information provided by PNC in connection with an independent third party compliance or other review; or

(ix)

it has been or is independently developed or obtained by the receiving party.

Cooperation with Accountants . PNC shall cooperate with the Fund’s independent public accountants and shall take all reasonable actions in the performance of its obligations under this Agreement to ensure that the necessary information is made available to such accountants for the expression of their opinion, as reasonably required by the Fund from time to time.

PNC System . PNC shall retain title to and ownership of any and all data bases, computer programs, screen formats, report formats, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents, copyrights, trade secrets, and other related legal rights utilized by PNC in connection with the services provided by PNC to the Fund. Notwithstanding the foregoing, the parties acknowledge that the Fund shall retain all ownership rights in Fund data which resides on the PNC System.

10.

Disaster Recovery . PNC shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provisions for emergency use of electronic data processing equipment to the extent appropriate equipment is available. In the event of equipment failures, PNC shall, at no additional expense to the Fund, take reasonable steps to minimize service interruptions. PNC shall have no liability with respect to the loss of data or service interruptions caused by equipment failure provided such loss or interruption is not caused by PNC’s own willful misfeasance, bad faith, negligence or reckless disregard of its duties or obligations under this Agreement.

11.	Compensation .

(a)

As compensation for services rendered by PNC pursuant to this Agreement, the Fund will pay to PNC a fee or fees as may be agreed to in writing from time to time by the Fund and PNC.

(b)

PNC shall establish certain cash management accounts (“Service Accounts”) required to provide services under this Agreement. The Fund acknowledges (i) PNC may receive investment earnings from sweeping the funds in such Service Accounts into investment accounts including, but not limited, investment accounts maintained at an affiliate or client of PNC; (ii) balance credits earned with respect to the amounts in such Service Accounts (“Balance Credits”) will be used to offset the banking service fees imposed by the cash management service provider (the “Banking Service Fees”); (iii) PNC shall retain- any excess Balance Credits for its own- use;- and (iv) Balance Credits will be calculated and applied toward the Fund’s Banking Service Fees regardless of the Service Account balance sweep described in Section 11(b)(i).

(c)

PNC may use the services of third-party vendors in connection with the issuance of redemption and distribution checks and may receive benefits obtained from any arrangements with such vendors, including any commission or return on float paid to it by any such vendors, provided however, PNC shall on a monthly basis pay to the Fund an amount equal to 90% of the redemption and distribution check balances held by such vendors multiplied by the current Treasury Bill Rate less thirty basis points (i.e., 90% of balances x (T-Bill – 30 basis pts.)).

(d)

The Fund hereby represents and warrants to PNC that (i) in terms of this Agreement, (ii) the fees and expenses associated with this Agreement, and (iii) any benefits accruing to PNC or to the advisor or sponsor or another affiliate of the Fund in connection with this Agreement, including but not limited to any fee waivers, conversion cost reimbursements, up front payments, signing payments or periodic payments relating to this Agreement have been fully disclosed to the Board of Trustees of the Fund and that, if required by applicable law, such Board of Trustees has approved or will approve the terms of this Agreement, any such fees and expenses, and any such benefits.

12.	Indemnification .

(a)

The Fund agrees to indemnify, defend and hold harmless PNC and its affiliates, including their respective officers, directors and employees, from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, reasonable attorneys’ fees and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) arising directly or indirectly from any action or omission to act taken or omitted by or on behalf of PNC in connection with the provision of services to the Fund, provided that in each case in which indemnification is sought PNC has not acted contrary to the standard of care set forth in Section 13(a) of this

Agreement. Neither PNC, nor any of its affiliates, shall be indemnified against any liability to the Fund or its shareholders (or any expenses incident to such liability) arising out of PNC’s or its affiliates’ own willful misfeasance, bad faith, negligence or breach of this Agreement on its part in the performance of its duties under this Agreement, provided that in the absence of a finding to the contrary the acceptance, processing and/or negotiation of a fraudulent payment for the purchase of Shares shall be presumed not to have arisen out of PNC’s or its affiliates’ own willful misfeasance, bad faith, negligence or breach of this Agreement. The obligations of each Portfolio under this Section 12(a) shall be the several (and not joint or joint and several) obligation of each Portfolio.

(b)

PNC agrees to indemnify, defend and hold harmless the Fund and its affiliates, including their respective officers, directors and employees, from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, reasonable attorney’s fees and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) arising directly or indirectly out of PNC’s willful misfeasance, bad faith, negligence or breach of this Agreement on its part in the performance of PNC’s duties under this Agreement.

(c)

The provisions of this Section 12 shall survive termination of this Agreement.

13.	Responsibility of PNC .

(a)

PNC shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by PNC in writing. PNC shall be obligated to exercise reasonable care and diligence in the performance of its duties hereunder and to act in good faith in performing services provided for under this Agreement. PNC shall not be liable for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith, negligence or breach of this Agreement on PNC’s part in the performance of its duties under this Agreement.

(b)

Notwithstanding anything in this Agreement to the contrary, (i) PNC shall not be responsible or liable for losses, delays, failure, errors, interruption or loss of data occurring directly or indirectly by reason of circumstances beyond its reasonable control, including without limitation acts of God; action or inaction of civil or military authority; public enemy; war; terrorism; riot; fire; flood; sabotage; epidemics; labor disputes; civil commotion; interruption, loss or malfunction of utilities, transportation, computer or communications capabilities; insurrection; elements of nature; or non-performance by a third party; (ii) PNC shall be responsible (pursuant to the standard of care set forth in Section 13(a) of this Agreement) for the accuracy of files containing monthly statement information or other information (if any) that PNC is required to produce and provide electronically to the Fund pursuant to this Agreement, but in no event shall PNC be responsible or liable for the accuracy or inaccuracy of any subsequent indexing and presentation by any entity other than PNC of such monthly statement information or other information or for any subsequent data integrity errors in such monthly statement information or other information; and (iii) subject to Section 13(a) of this Agreement, PNC shall not be under any duty or obligation to inquire into and shall not be liable for the validity or invalidity, authority or lack thereof, or truthfulness or accuracy or lack thereof, of any instruction, direction, notice or instrument believed by PNC to be genuine.

(c)

Notwithstanding anything in this Agreement to the contrary, neither PNC nor its affiliates shall be liable for any consequential, special or indirect losses or damages, whether or not the likelihood of such losses or damages was known by PNC or its affiliates.

(d)

The provisions of this Section 13 shall survive termination of this Agreement.

14.	Description of Services .

(a)

Services Provided on an Ongoing Basis, If Applicable.

(i)

Calculate 12b-1 payments;

(ii)

Maintain shareholder registrations;

(iii)

Review new applications and correspond with shareholders to complete or correct information;

(iv)

Direct payment processing of checks or wires;

(v)

Prepare and certify stockholder lists in conjunction with proxy solicitations;

(vi)

Countersign share certificates;

(vii)

Prepare and mail to shareholders confirmation of activity;

(viii)

Calculate front-end sales charges and deferred sales charges payable in connection with the purchase of Series A Investor Class Shares and Series B Investor Class Shares, respectively, and provide for the payment of all such sales charges to or on behalf of the Fund’s distributor (unless otherwise instructed by the Fund or the Fund’s distributor);

(ix)

Provide toll-free lines for direct shareholder use, plus customer liaison staff for on-line inquiry response;

(x)

Mail duplicate confirmations to broker-dealers of their clients’ activity, whether executed through the broker-dealer or directly with PNC;

(xi)

Provide periodic shareholder lists and statistics to the Fund;

(xii)

Provide detailed data for underwriter/broker confirmations in accordance with such procedures as may be agreed between the Fund and PNC;

(xiii)

Prepare periodic mailing of year-end tax and statement information;

(xiv)

Notify on a timely basis the investment adviser, accounting agent, and custodian of Share activity;

(xv)

Perform other participating broker-dealer shareholder services as agreed upon from time to time;

(xvi)

Accept and post daily Share purchases and redemptions;

(xvii)

Accept, post and perform shareholder transfers and exchanges;

(xviii)

Issue and cancel Share certificates (when requested in writing by the shareholder); and

(xix)

Upon reasonable request, furnish monthly reports of transactions in Shares reflecting such information as agreed between the Fund and PNC from time to time.

(b)

Purchase of Shares . PNC shall issue and credit an account of an investor, in the manner described in the Portfolio’s prospectus, once it receives:

(i)

A purchase order in completed proper form;

(ii)

Proper information to establish a shareholder account; and

(iii)

Confirmation of receipt or crediting of funds for such order to the Portfolio’s custodian.

(c)

Redemption of Shares . PNC shall process requests to redeem Shares as follows:

(i)

All requests to transfer or redeem Shares and payment therefor shall be made in accordance with the Portfolio’s prospectus, when the shareholder tenders Shares in proper form, accompanied by such documents as PNC reasonably may deem necessary.

(ii)

PNC reserves the right to refuse to transfer or redeem Shares until it is reasonably satisfied that the endorsement on the instructions is valid and genuine and that the requested transfer or redemption is legally authorized, and it shall incur no liability for the reasonable refusal, in good faith, to process transfers or redemptions which PNC, in its good judgment, deems improper or unauthorized, or until it is reasonably satisfied that there is no basis to any claims adverse to such transfer or redemption.

(iii)

When Shares are redeemed, PNC shall deliver to the Portfolio’s custodian (the “Custodian”) and the Fund or its designee a notification setting forth the number of Shares redeemed. Such redeemed Shares shall be reflected on appropriate accounts maintained by PNC reflecting outstanding Shares of the Fund and Shares attributed to individual accounts.

(iv)

PNC shall, upon receipt of the monies provided to it by the Custodian for the redemption of Shares, pay such monies as are received from the Custodian, all in accordance with the procedures established from time to time between PNC and the Fund.

(v)

When a broker-dealer notifies PNC of a redemption desired by a customer, and the Custodian provides PNC with funds, PNC shall prepare and send the redemption check to the broker-dealer and made payable to the broker-dealer on behalf of its customer, unless otherwise instructed in writing by the broker-dealer.

(vi)

PNC shall not process or effect any redemption requests with respect to Shares after receipt by. PNC or its agent of notification of the suspension of the determination of the net asset value of the applicable Portfolio.

(d)

Dividends and Distributions . Upon receipt of a resolution of the Fund’s Board of Trustees authorizing the declaration and payment of dividends and distributions, PNC shall issue dividends and distributions declared by the Fund in Shares, or, upon shareholder election, pay such dividends and distributions in cash, if provided for in the Portfolio’s prospectus. Such issuance or payment, as well as payments upon redemption as described in sub-section (c) above, shall be made after deduction and payment of the required amount of funds to be withheld in accordance with any applicable tax laws or other laws, rules or regulations. PNC shall mail to the Fund’s shareholders such tax forms and other information, or permissible substitute notice, relating to dividends and distributions paid by the Fund as are required to be filed and mailed by applicable law, rule or regulation. Only upon Written Instructions, PNC shall prepare and deliver written statements required to be issued pursuant to Section 19(a) of the 1940 Act. PNC shall prepare, maintain and file with the IRS and other appropriate taxing authorities reports relating to all dividends above a stipulated amount paid by the Fund to its shareholders as required by tax or other law, rule or regulation.

(e)

Shareholder Account Services .

(i)

PNC may arrange, in accordance with the Portfolio’s prospectus and such procedures and controls as are mutually agreed upon from time to time among the Fund, PNC and the Custodian for issuance of Shares obtained through:

Any pre-authorized check plan; and

Direct purchases through broker wire orders, checks and applications.

(ii)

Exchange of Shares for shares of another fund with which the Fund has exchange privileges;

Automatic redemption from an account where that shareholder participates in an automatic redemption plan; and/or

Redemption of Shares from an account with a checkwriting privilege.

(f)

Communications to Shareholders . (i) Upon timely Written Instructions, PNC shall mail communications by the Fund to its shareholders, including, without limitation:

(A)

Reports to shareholders;

(B)

Confirmations of purchases and redemptions of Shares;

(C)

Quarterly statements or (subject to the second sentence of sub-item (ii) below) monthly statements;

(D)

Dividend and distribution notices; and

(E)

Tax form information.

(ii)

Upon timely Written Instructions PNC will, with respect only to shareholder accounts that are maintained on PNC’s Order Entry Pass institutional transfer agency system (but not its other transfer agency systems) (“OEP System”), provide the Fund with monthly statement information from the OEP System which information relates to such shareholder accounts by the fifth business day of each month in a mutually agreeable electronic format. PNC will continue to mail associated monthly statements to shareholders whose monthly statement information is provided electronically to the Fund pursuant to the preceding sentence, except that PNC will not mail such monthly statements to such shareholders if such shareholders request via appropriate electronic means acceptable to the Fund and PNC that PNC suppress such mailings.

(iii)

PNC will answer such correspondence from shareholders, securities brokers and others relating to its duties hereunder and such other correspondence as may from time to time be mutually agreed upon between PNC and the Fund.

(g)

Records . PNC shall maintain records of the accounts for each shareholder showing the following information:

(i)

Name, address and United States Tax Identification or Social Security number;

(ii)

Number and class of Shares held and number and class of Shares for which certificates, if any, have been issued, including certificate numbers and denominations;

(iii)

Historical information regarding the account of each shareholder, including: (a) information relating to dividends and distributions paid, (b) the date and price for all transactions relating to a shareholder’s account, and (c) information necessary to calculate, in accordance with the Fund’s registration statement, the appropriate contingent deferred sales charge (“CDSC”) payable with respect to Series B Investor Class Shares;

(iv)

Any stop or restraining order placed against a shareholder’s account;

(v)

Any correspondence relating to the current maintenance of a shareholder’s account;

(vi)

Information with respect to withholdings; and

(vii)

Any information required in order for PNC to perform any calculations required by this Agreement.

With respect to shareholder accounts maintained on the OEP System, PNC shall maintain sub-accounts for each shareholder requesting such services in connection with Shares held by such shareholder in separate accounts on the OEP System. Each such sub-account shall contain the same information as that described above for accounts.

(h)

Lost or Stolen Certificates . PNC shall place a stop notice against any certificate reported to be lost or stolen and comply with all applicable federal regulatory requirements for reporting such loss or alleged misappropriation. A new certificate shall be registered and issued only upon:

(i)

The shareholder’s pledge of a lost instrument bond or such other appropriate indemnity bond issued by a surety company approved by PNC; and

(ii)

Completion of a release and indemnification agreement signed by the shareholder to protect PNC and its affiliates.

(i)

Shareholder Inspection of Stock Records . PNC will, upon request from a Portfolio shareholder to inspect stock records, notify the Fund and the Fund will issue instructions granting or denying each such request. Unless PNC has acted contrary to Fund instructions, the Fund agrees to and does hereby release PNC from any liability for reasonable refusal of permission for a particular shareholder to inspect the Fund’s stock records.

(j)

Withdrawal of Shares and Cancellation of Certificates . Upon receipt of Written Instructions, PNC shall cancel outstanding certificates surrendered by the Fund to reduce the total amount of outstanding shares by the number of shares surrendered by the Fund.

(k)

Lost Shareholders . PNC shall perform such services as are required in order to comply with rule 17Ad-17 of the 1934 Act (the “Lost Securityholder Rule”), including, but not limited to, those set forth below. PNC may, in its sole discretion, use the services of a third party to perform some of or all such services.

(i)

documentation of search policies and procedures;

(ii)

execution of required searches;

(iii)

tracking results and maintaining data sufficient to comply with the Lost Securityholder Rule; and

(iv)

preparation and submission of data required under the Lost Securityholder Rule.

“Lost Shareholder” services will not be performed by PNC on any shareholder accounts that are broker-controlled accounts where PNC is not able to identify and depict “RPO” status. Except as set forth above, PNC shall have no responsibility for any escheatment services.

(l)

Retirement Plans and Educational Savings Accounts .

(i)

In connection with Traditional, SEP, Roth, and SIMPLE individual retirement accounts (“IRA accounts”), 403(b)(7) custodial accounts, money purchase and profit sharing plans and Single Participant “k” plan accounts (“Qualified Plans”) (collectively, the “Retirement Plans”) and Coverdell educational savings accounts (“ESA Accounts”) all within the meaning of Section 408, 403(b)(7), 401, and 530 of the Internal Revenue Code of 1986, as amended (the “Code”) sponsored by the Fund for which contributions of the Fund’s shareholders (the “Participants”) are invested solely in Shares of the Fund, PNC shall provide the following administrative services:

(A)

Establish a record of types and reasons for distributions (i.e., attainment of age 59-1/2, disability, death, return of excess contributions, etc.);

(B)

Record method of distribution requested and/or made;

(C)

Receive and process designation of beneficiary forms requests;

(D)

Examine and process requests for direct transfers between custodians/trustees; transfer and pay over to the successor assets in the account and records pertaining thereto as requested;

(E)

Prepare any annual reports or returns required to be prepared and/or filed by a custodian of a Retirement Plan and ESA Accounts, including, but not limited to, an annual fair market value report, Forms 1099R and 5498; and file same with the Internal Revenue Service and provide same to Participant/Beneficiary, as applicable; and

(F)

Perform applicable federal withholding and send Participants/Beneficiaries an annual TEFRA notice regarding required federal tax withholding.

(ii)

PNC shall arrange for PFPC Trust Company to serve as custodian for the Retirement Plans sponsored by the Fund.

(iii)

With respect to the Retirement Plans, PNC shall provide the Fund with the associated Retirement Plan documents for use by the Fund and PNC shall be responsible for the maintenance of such documents in compliance with all applicable provisions of the Code and the regulations promulgated thereunder.

(m)

Print Mail . The Fund hereby engages PNC as its exclusive print/mail service provider with respect to those items and for such fees as agreed to from time to time in writing by the Fund and PNC.

(n)

Proxy Advantage . The Fund hereby engages PNC as its exclusive proxy solicitation service provider with respect to those items and for such fees as agreed to from time to time in writing by the Fund and PNC. If so agreed from time to time in writing by the Fund and PNC, such services may include mailing proxy statements and proxy cards to shareholders.

(o)

Internet Account Management Services . PNC shall provide to the Fund the services specified in Exhibit B attached hereto and made a part hereof, subject to and in accordance with the terms set forth in such Exhibit B, as such Exhibit B may be amended from time to time.

(p)

Wrap Processing Services . With respect to Shares attributable to the Wrap Program as defined below), instead of the services set forth in this Agreement, PNC shall perform the services specified in Exhibit C attached hereto and made a part hereof, subject to and in accordance with the terms set forth in such Exhibit C, as such Exhibit C may be amended from time to time, for the benefit of the “Wrap Program Participants” (as defined below) who maintain Shares through Wrap Programs (“Wrap Processing Services”). PNC may subcontract with “Clients” (as defined below) to link PNC’s system with the Clients, in order for Clients to maintain Fund Share positions for each Wrap Program Participant and/or perform certain services identified in Exhibit C. For purposes of this Section 14(p) and Exhibit C, the following terms have the following meanings: “Clients” means financial institutions which offer Wrap Programs; “Wrap Programs” means mutual funds-only asset allocation, supermarket and/or other similar products offered by Clients which require sub-transfer agent and sub-accounting services; “Wrap Program Participants” means customers of Clients to whom Wrap Programs are offered. The Fund’s obligation to pay PNC for Wrap Processing Services shall survive the termination of this Agreement and continue for so long as there are assets in the Omnibus Accounts (i.e., the Omnibus Accounts referenced in Exhibit C attached hereto) attributable to Shares. In the event of a conflict between (i) the specific terms of this Section 14(p) and/or Exhibit C and (ii) the remaining provisions of this Agreement, the terms of this Section 14(p) and Exhibit C control as to the services set forth in this Section 14(p) and Exhibit C.

(q)

Anti-Money Laundering .

(i)

PNC shall perform reasonable actions necessary to help the Fund be in compliance with United States federal anti-money laundering (“AML”) laws applicable to mutual funds (i.e., the Bank Secrecy Act as amended by the USA PATRIOT Act of 2001) as follows: (A) establish and implement written policies, procedures and internal controls reasonably designed to prevent the Fund from being used to launder money or finance terrorist activities; (B) provide for independent testing, by an employee who is not responsible for the operation of PNC’s AML program or by an outside party, for compliance with PNC’s established AML policies and procedures; (C) designate a person or persons

responsible for implementing and monitoring the operation and internal controls of PNC’s AML program; and (D) provide ongoing training of PNC personnel relating to the prevention of money-laundering activities. Upon the reasonable request of the Fund, PNC shall provide to the Fund: (X) a copy of PNC’s written AML policies and procedures (it being understood such information is to be considered confidential and treated as such and afforded all protections provided to Confidential Information under this Agreement); (Y) at the option of PNC, a copy of a written assessment or report prepared by the party performing the independent testing for compliance, or a summary thereof, or a certification that the findings of the independent party are satisfactory; and (Z) a summary of the AML training provided for appropriate PNC personnel. PNC agrees to permit inspections relating to PNC’s AML program by United States federal departments or regulatory agencies with appropriate jurisdiction and to make available to examiners from such departments or regulatory agencies such information and records relating to PNC’s AML program as such examiners shall reasonably request.

(ii)

To help the Fund comply with its requirements to establish and implement a due diligence program for “foreign financial institution” accounts (which the Fund is required to have under regulations issued under Section 312 of the USA PATRIOT Act), PNC will do the following with respect to the Fund:

(A)

Implement and operate a due diligence program that includes appropriate, specific, risk-based policies, procedures and controls that are reasonably designed to enable the Fund to detect and report, on an ongoing basis, any known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered or managed by the Fund for a “foreign financial institution” (as defined in 31 CFR 103.175(h)) (“Foreign Financial Institution”);

(B)

Conduct due diligence to identify and detect any Foreign Financial Institution accounts in connection with new accounts and account maintenance;

(C)

Assess the money laundering risk presented by each such Foreign Financial Institution account, based on a consideration of all appropriate relevant factors (as generally outlined in 31 CFR 103.176), and assign a risk category to each such Foreign Financial Institution account;

(D)

Apply risk-based procedures and controls to each such Foreign Financial Institution account reasonably designed to detect and report known or suspected money laundering activity, including a periodic review of the Foreign Financial Institution account activity sufficient to determine consistency with information obtained about the type, purpose and anticipated activity of the account;

(E)

Include procedures to be followed in circumstances in which the appropriate due diligence cannot be performed with respect to a Foreign Financial Institution account;

(F)

Adopt and operate enhanced due diligence policies, where necessary, as may be required by future regulations pending for Foreign Financial Institution accounts;

(G)

Record due diligence program and maintain due diligence records relating to Foreign Financial Institution accounts; and

(H)

Report to the Fund about measures taken under (A)-(G) above.

Notwithstanding anything in this Agreement or otherwise to the contrary, and without expanding the scope of the express language in this Section 14(q)(ii), PNC need not complete any due diligence beyond the requirements of the relevant Foreign Financial Institution due diligence program regulations and PNC need not perform any task that need not be performed for the Fund to be in compliance with relevant Foreign Financial Institution due diligence program regulations.

Notwithstanding anything in this Section 14(q)(ii) to the contrary, the provisions of this Section 14(q)(ii) specifically excludes private bank account provisions of Section 312 of the USA PATRIOT Act.

(r)

Regulatory Requests . PNC will provide information and documentation relating to the Fund or other assistance relating to such information and documentation as the Fund may reasonably request to help the Fund respond to any government or regulatory request, including but not limited to a subpoena or request for information, provided, however, that if responding to such a request would cause an undue burden on PNC or would cause PNC to bear undue expense, PNC at its option may decline such request or shall be entitled to such fees or reimbursement of expenses as agreed to by the Fund and PNC.

(s)

Fund Information Requests . PNC will provide such information relating to the Fund as the Fund may reasonably request in connection with the services provided by PNC to the Fund pursuant to this Agreement, provided, however, that if responding to such a request would cause an undue burden on PNC or would cause PNC to bear undue expense, PNC at its option may decline such request or shall be entitled to such fees or reimbursement of expenses as agreed to by the Fund and PNC.

(t)

Access to Policies and Procedures . In connection with the Fund’s obligations under Rule 38a-1 of the 1940 Act, PNC shall (i) provide, via internet access, PNC’s policies and procedures related to the services that PNC is required to perform pursuant to this Agreement and summaries thereof, (ii) provide e-mail notification of updates to such policies and procedures, and (iii) upon request provide quarterly certifications with respect to such policies and procedures.

(u)

Other Services . PNC will provide such additional services to the Fund pursuant to this Agreement as shall be agreed in writing between the Fund and PNC from time to time.

15.

Duration and Termination . This Agreement shall continue in effect for a term of three years commencing as of the date hereof, and at the end of such three-year period shall automatically continue for successive one-year terms, provided, that the Fund’s Board of Trustees (“Board”) shall review this Agreement from time to time and at least annually in reference to the terms and conditions specifically set forth below in clauses (a)(i) to (a)(iii) of this Section 15. Notwithstanding the above, this Agreement may be terminated:

(a)

during the first three years, without the payment of any penalty for such termination:

(i)

by the Fund, on ninety (90) days’ prior written notice, as may be required by and consistent with the Board’s fiduciary obligations under the 1940 Act in connection with any annual review; however, in connection with such review of this Agreement by the Board, the Board acknowledges the fees to be received by PNC hereunder are fair and reasonable for a three-year term; or

(ii)

by the Fund, on sixty (60) days’ prior written notice, if PNC is in material breach of this Agreement and PNC has not remedied such breach within such sixty (60) day period; or

(iii)

by the Fund, on sixty (60) days’ prior written notice, if PNC:

(A)

enters into a transaction that would result in a change of control of greater than 50% of the beneficial ownership of the shares of beneficial interest of PNC, other than any such change of control where the Board determines the successor entity has similar financial standing and ability to provide services hereunder as PNC; or

(B)

files a petition for bankruptcy, or another comparable filing by PNC has occurred; or

(C)

has a materially impaired financial condition; or

(D)

has a significant regulatory problem or is the subject of a significant regulatory investigation; and

in the case of subsections (1) through (4) above, the Board determines in the exercise of its fiduciary obligations under the 1940 Act that such event materially impairs PNC’s ability to perform its duties under this Agreement; or

(iv)

by PNC, on one hundred fifty (150) days prior written notice, if the Fund is in material breach of the Agreement; and

(b)

at any time after the first three years, without the payment of any penalty, on ninety (90) days prior written notice by the Fund or on one hundred fifty (150) days prior written notice by PNC.

In the event of termination by the Fund pursuant to Sections 15(a)(i) or (b) or by PNC after a material breach of this Agreement by the Fund, all expenses (which shall not be

deemed a penalty) associated with movement (or duplication) of records and materials, deconversion and conversion to a successor transfer agent or other service provider incurred by PNC, will be borne by the Fund.

During the first three years commencing as of the date hereof, BlackRock Advisors, LLC will not recommend termination of this Agreement provided such action or inaction by BlackRock Advisors, LLC is not contrary to its fiduciary obligations to the Fund.

16.

Notices . Notices shall be addressed (a) if to PNC, at 301 Bellevue Parkway, Wilmington, Delaware 19809, Attention: President (or such other address as PNC may inform the Fund in writing); (b) if to the Fund, at BlackRock Funds III, 40 East 52nd Street, New York, New York 10022, Attention: Robert Connolly, Esq. (or such other address as the Fund may inform PNC in writing); or (c) if to neither of the foregoing, at such other address as shall have been given by like notice to the sender of any such notice or other communication by the receiving party. If notice is sent by confirming telegram, cable, telex or facsimile sending device, it shall be deemed to have been given immediately. If notice is sent by first-class mail, it shall be deemed to have been given three days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.

17.	Amendments . This Agreement, or any term hereof, may be changed or waived only by written amendment, signed by the party against whom enforcement of such change or waiver is sought.

18.	Assignment . PNC may assign this Agreement to any affiliate of PNC or of The PNC Financial Services Group, Inc., provided that PNC obtains the Fund’s prior written consent to such assignment.

19.	Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20.	Further Actions . Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.

21.

Registration as a Transfer Agent . PNC represents that it is currently registered with the appropriate Federal agency for the registration of transfer agents, and that it will remain so registered for the duration of this Agreement. PNC agrees that it will promptly notify the Fund in the event of any material change in its status as a registered transfer agent. Should PNC fail to be registered with the appropriate Federal agency as a transfer agent at any time during this Agreement, the Fund may, on written notice to PNC, immediately terminate this Agreement as to any or all Portfolios of the Fund.

22.	Miscellaneous .

(a)

Entire Agreement . This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof, provided that the parties may embody in one or more separate documents their agreement, if any, with respect to delegated duties.

(b)

No Changes that Materially Affect Obligations . Notwithstanding anything in this Agreement or otherwise to the contrary, the Fund agrees that no modifications to its registration statement and no policies which it may adopt or resolutions which the Board may adopt will affect materially the obligations or responsibilities of PNC hereunder without the prior written approval of PNC, which approval shall not be unreasonably withheld or delayed.

(c)

Captions . The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

(d)

Information . The Fund will provide such information and documentation as PNC may reasonably request in connection with services provided by PNC to the Fund.

(e)

Governing Law . This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law, without regard to principles of conflicts of law.

(f)

Partial Invalidity . If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. Notwithstanding the foregoing sentence, if any provision of this Agreement relating directly or indirectly to the term of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the parties shall immediately negotiate in good faith in order to agree upon a new provision which is either (i) economically equivalent to the invalid provision or (ii) acceptable to the party adversely affected by the invalidity of the prior provision.

(g)

Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

(h)

No Representations or Warranties . Except as expressly provided in this Agreement, PNC hereby disclaims all representations and warranties, express or implied, made to the Fund or any other person, including, without limitation, any warranties regarding quality, suitability, merchantability, fitness for a particular purpose or otherwise (irrespective of any course of dealing, custom or usage of trade), of any services or any goods provided incidental to services provided under this Agreement. PNC disclaims any warranty of title or non-infringement except as otherwise set forth in this Agreement.

(i)

Facsimile Signatures . The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

(j)

Privacy . Each party hereto acknowledges and agrees that, subject to the reuse and re-disclosure provisions of Regulation S-P, 17 CFR Part 248.11, it shall not disclose the non-public personal information of investors in the Fund obtained under this Agreement, except as necessary to carry out the services set forth in this Agreement or as otherwise permitted by law or regulation.

(k)

Customer Identification Program Notice . To help the United States government fight the funding of terrorism and money laundering activities, United States federal law requires

each financial institution to obtain, verify, and record certain information that identifies each person who initially opens an account with that financial institution on or after October 1, 2003. Certain of PNC’s affiliates are financial institutions, and PNC may, as a matter of policy, request (or may have already requested) the Fund’s name, address and taxpayer identification number or other government-issued identification number, and, if such party is a natural person, that party’s date of birth. PNC may also ask (and may have already asked) for additional identifying information, and PNC may take steps (and may have already taken steps) to verify the authenticity and accuracy of these data elements.

(l)

Liability of Trustees, etc . The names “BlackRock Fund II” and “Trustees of BlackRock Funds II” refer specifically to the trust created and the Trustees, as trustees but not individually or personally, acting from time to time under a Declaration of Trust dated April 26, 2007, which is hereby referred to and a copy of which is on file at the office of the State Secretary of the Commonwealth of Massachusetts and at the principal office of the Fund. The obligations of “BlackRock Funds II” entered into in the name or on behalf thereof by any of the Trustees, officers, representatives or agents are not made individually, but in such capacities, and are not binding upon any of the Trustees, officers, shareholders, representatives or agents of the Fund personally, but bind only the Trust Property (as defined in the Declaration of Trust), and all persons dealing with any class of Shares of the Fund must look solely to the Trust Property belong to such class for the enforcement of any claims against the Fund.

23.	Customer Identification Program Services .

(a)

To help the Fund comply with its Customer Identification Program (which the Fund is required to have under regulations issued under Section 326 of the USA PATRIOT Act) PNC will do the following:

(i)

Implement procedures under which new accounts in the Portfolios are not established unless PNC has obtained the name, date of birth (for natural persons only), address and government-issued identification number (collectively, the “Data Elements”) for each corresponding “Customer” (as defined in 31 CFR 103.131).

(ii)

Use collected Data Elements to attempt to reasonably verify the identity of each new Customer promptly before or after each corresponding new account is opened. Methods of verification may consist of non-documentary methods (for which PNC may use unaffiliated information vendors to assist with such verifications) and documentary methods (as permitted by 31 CFR 103.131), and may include procedures under which PNC personnel perform enhanced due diligence to verify the identities of Customers the identities of whom were not successfully verified through the first-level (which will typically be reliance on results obtained from an information vendor) verification process(es).

(iii)

Record the Data Elements and maintain records relating to verification of new Customers consistent with 31 CFR 103.131(b)(3).

(iv)

Determine whether any Customer’s name appears on a list of known or suspected terrorists or terrorist organizations designated by the Department of the Treasury, if any, consistent with 31 CFR 103.131(b)(4).

(v)

Regularly report to the Fund about measures taken under (i)-(iv) above.

(vi)

If PNC provides services by which prospective Customers may subscribe for Shares via the Internet or telephone, work with the Fund to notify prospective Customers, consistent with 31 CFR 103.131(b)(5), about the Fund’s Customer Identification Program.

(vii)

Annually, or upon the Fund’s reasonable request, certify that PNC continues to implement its duties set forth under this Section 23(a).

(b)

Notwithstanding anything in this Agreement or otherwise to the contrary, and without expanding the scope of the express language set forth above in Section 23(a), PNC need not collect the Data Elements for (or verify) prospective customers (or accounts) beyond the requirements of relevant customer identification program regulations (for example, PNC will not verify customers opening accounts through NSCC) and PNC need not perform any task that need not be performed for the Fund to be in compliance with relevant customer identification program regulations.

(c)

Notwithstanding anything in this Agreement or otherwise to the contrary, PNC need not perform any of the steps described above in this Section 23 with respect to persons purchasing Shares via exchange privileges.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below.


PNC GLOBAL INVESTMENT SERVICING (U.S.) INC.

By:

Name:

Title:

Date:

BLACKROCK FUNDS III

By:

Name:

Title:

Date:

By executing this joinder to this Agreement, BlackRock Advisors, LLC hereby agrees to be bound by all of the terms, provisions, covenants and obligations set forth in Section 15 of this Agreement.


BLACKROCK ADVISORS, LLC

By:

Name:

Title:

Date:

EXHIBIT A

THIS EXHIBIT A, dated as of March 29, 2010, is Exhibit A to that certain Transfer Agency Agreement dated as of March 29, 2010, between PNC Global Investment Servicing (U.S.) Inc. and BlackRock Funds III.

PORTFOLIOS

LifePath Retirement Portfolio — Class I

LifePath Retirement Portfolio — Class R

LifePath Retirement Portfolio — Class S

LifePath 2010 Portfolio — Class I

LifePath 2010 Portfolio — Class R

LifePath 2010 Portfolio — Class S

LifePath 2020 Portfolio — Class I

LifePath 2020 Portfolio — Class R

LifePath 2020 Portfolio — Class S

LifePath 2030 Portfolio — Class I

LifePath 2030 Portfolio — Class R

LifePath 2030 Portfolio — Class S

LifePath 2040 Portfolio — Class I

LifePath 2040 Portfolio — Class R

LifePath 2040 Portfolio — Class S

LifePath 2050 Portfolio — Class I

LifePath 2050 Portfolio — Class R

LifePath 2050 Portfolio — Class S

BlackRock S&P 500 Stock Fund

BlackRock Bond Index Fund

EXHIBIT B

Internet Account Management Services

1.	Definitions . Any term not herein defined in this Exhibit B shall have the meaning given such term in the Agreement. The following definitions shall apply to this Exhibit B:

(a)

“End-User” shall mean any Shareholder that accesses the PNC System via internet account management.

(b)

“Fund Web Site” means the collection of electronic documents, electronic files and pages residing on any computer system(s) maintained on behalf of the Fund, connected to the Internet and accessible by hypertext link through the World Wide Web to and from internet account management.

(c)

“Inquiry” shall mean any access to the PNC System via Internet Account Management System initiated by an End-User which is not a Transaction.

(d)

“Internet” shall mean the communications network comprised of multiple communications networks linking education, government, industrial and private computer networks.

(e)

“Internet Account Management Services” or “IAM Services” means the services identified in Section 2 hereof to be provided by PNC utilizing the Fund Web Site, the Internet and certain software, equipment and systems provided by PNC, telecommunications carriers and security providers which have been certified by ICSA or a nationally-recognized audit firm (including but not limited to firewalls and encryption), whereby Inquires may be performed and. Transactions may be requested by accessing Internet Account Management System via hypertext link from the Fund Web Site.

(f)

“Internet Account Management System” or “IAM System” means the collection of electronic documents, electronic files and pages residing on PNC’s computer system(s) (or those elements of the computer system of one or more Internet Service Providers (“ISPs”) retained by PNC and necessary for PNC’s services hereunder), connected to the Internet and accessible by hypertext link from the Fund Web Site through the World Wide Web, where the Inquiry and Transaction data fields and related screens provided by PNC may be viewed.

(g)

“Shareholder” means the record owner or authorized agent of the record owner of shares of the Fund.

(h)

“Transaction” shall mean purchase, redemption, exchange or any other activity involving the movement of Shares initiated by an End-User.

2.	PNC Responsibilities . Subject to the provisions of this Exhibit B, PNC shall provide or perform, or shall retain other persons to provide or perform, the following, at PNC’s expense (unless otherwise provided herein):

(a)

provide all computers, telecommunications equipment, encryption technology and other materials and services reasonably necessary to develop and maintain IAM System to permit persons to be able to view information about the Fund and to permit End-Users with appropriate identification and access codes to perform Inquiries and initiate Transactions;

(b)

address and mail, at the Fund’s expense, notification and promotional mailings and other communications provided by the Fund to Shareholders regarding the availability of IAM Services;

(c)

prepare and process new account applications received through IAM System from Shareholders determined by the Fund to be eligible for such services and in connection with such, the Fund agrees as follows:

(i)

to permit the establishment of Shareholder bank account information over the Internet in order to facilitate purchase activity through the Automated Clearing House (“ACH”);

(ii)

the ACH prenote process will be waived and the ACH status will be set to active; and

(iii)

the Fund shall be responsible for any resulting gain/loss liability associated with the ACH process.

(d)

process the set up of personal identification numbers (“PIN”), as described in the IAM System Product Guide provided to the Fund, which shall include verification of initial identification numbers issued, reset and activation of personalized PIN’s and reissue of new PIN’s in connection with lost PIN’s;

(e)

provide installation services which shall include, review and approval of the Fund’s network requirements, recommending method of establishing (and, as applicable, cooperate with the Fund to implement and maintain) a hypertext link between IAM System and the Fund Web Site and testing the network connectivity and performance;

(f)

establish systems to guide, assist and permit End-Users who access IAM System from the Fund Web Site to electronically perform Inquires and create and transmit Transaction requests to PNC;

(g)

deliver to the Fund one (1) copy of the PNC IAM System Product Guide, as well as all updates thereto on a timely basis;

(h)

deliver a monthly billing report to the Fund, which shall include a report of Inquiries and Transactions;

(i)

provide a form of encryption that is generally available to the public in the U.S. for standard Internet browsers and establish, monitor and verify firewalls and other security features (commercially reasonable for this type of information and data) and exercise commercially reasonable efforts to attempt to maintain the security and integrity of IAM System;

(i)

exercise reasonable efforts to maintain all on-screen disclaimers and copyright, trademark and service mark notifications, if any, provided by the Fund to PNC in writing from time to time, and all “point and click” features of JAM System relating to Shareholder acknowledgment and acceptance of such disclaimers and notifications;

(k)

provide periodic site visitation (hit reports) and other information regarding End User activity under this Exhibit B as agreed by PNC and the Fund from time to time;

(1)

monitor the telephone lines involved in providing IAM Services and inform the Fund promptly of any malfunctions or service interruptions;

(m)

periodically scan PNC’s Internet interfaces and IAM System for viruses and promptly remove any such viruses located thereon; and

(n)

maintenance and support of JAM System, which includes providing error corrections, minor enhancements and interim upgrades to JAM System which are made generally available to customers and providing help desk support to provide assistance to Fund employees with the Fund’s use of IAM System; maintenance and support shall not include (i) access to or use of any substantial added functionality, new interfaces, new architecture, new platforms, new versions or major development efforts, unless made generally available by PNC to IAM System clients, as determined solely by PNC; or (ii) maintenance of customized features.

Notwithstanding anything in this Exhibit B or the Agreement to the contrary, the Fund recognizes and acknowledges that (i) a logon I.D. and PIN are required by End-Users to access PNC’s JAM System; (ii) End-User’s Web Browser and ISP must support Secure Sockets Layer (SSL) encryption technology; and (iii) PNC will not provide any software for access to the Internet; software must be acquired from a third-party vendor.

3.	Fund Responsibilities . Subject to the provisions of this Exhibit B and the Agreement, the Fund shall at its expense (unless otherwise provided herein):

(a)

provide, or retain other persons to provide, all computers, telecommunications equipment, encryption technology and other materials, services, equipment and software reasonably necessary to develop and maintain the Fund Web Site, including the functionality necessary to maintain the hypertext links to JAM System;

(b)

promptly provide PNC written notice of changes in Fund policies or procedures requiring changes to the IAM Services;

(c)

work with PNC to develop Internet marketing materials for End-Users and forward a copy of appropriate marketing materials to PNC;

(d)

revise and update the applicable prospectus(es) and other pertinent materials, such as user agreements with End-Users, to include the appropriate consents, notices and disclosures for IAM Services, including disclaimers and information reasonably requested by PNC;

(e)

maintain all on-screen disclaimers and copyright, trademark and service mark notifications, if any, provided by PNC to the Fund in writing from time to time, and all “point and click” features of the Fund Web Site relating to acknowledgment and acceptance of such disclaimers and notifications; and design and develop the Fund Web Site functionality necessary to facilitate, implement and maintain the hypertext links to IAM System and the various Inquiry and Transaction web pages and otherwise make the Fund Web Site available to End-Users.

4.	Standards of Care for Internet Services .

(a)

Notwithstanding anything in the Agreement or this Exhibit B to the contrary (other than as set forth in the immediately succeeding sentence) with respect to the provision of services set forth in this Exhibit B (i) PNC shall be liable only for its own willful misfeasance, bad faith, gross negligence or reckless disregard in the provision of such services and (ii) the Fund shall indemnify, defend and hold harmless PNC and its affiliates (including their respective officers, directors, agents and employees) from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, attorneys’ fees and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) incurred by such indemnified parties with respect to such services except for those for which PNC is liable under, sub-clause (i) of this sentence. For clarity, the provisions of the immediately preceding sentence shall not limit Sections 13(b), 13(c) or 13(d) of the Agreement or Section 7(c) of this Exhibit B. The provisions of this Section 4(a) shall survive termination of the Agreement and the provision of services set forth in this Exhibit B.

(b)

Notwithstanding anything to the contrary contained in the Agreement or this Exhibit B, PNC shall not be obligated to ensure or verify the accuracy or actual receipt, or the transmission, of any data or information contained in any transmission via JAM Services or the consummation of any Inquiry or Transaction request not actually received by PNC. The Fund shall advise End-Users to promptly notify the Fund or PNC of any errors or inaccuracies in Shareholder data or information transmitted via JAM Services.

5.	Proprietary Rights .

(a)

Each of the parties acknowledges and agrees that it obtains no rights in or to any of the software, hardware, processes, trade secrets, proprietary information or distribution and communication networks of the other under this Exhibit B. Any software, interfaces or other programs a party provides to the other under this Exhibit B shall be used by such receiving party only during the term of this Exhibit B and only in accordance with the provisions of this Exhibit B and the Agreement. Any interfaces, other software or other programs developed by one party shall not be used directly or indirectly by or for the other party or any of its affiliates to connect such receiving party or any affiliate to any other person, without the first party’s prior written approval, which it may give or withhold in its sole discretion. Except in the normal course of business and in conformity with Federal copyright law or with the other party’s consent, neither party nor any of its affiliates shall disclose, use, copy, decompile or reverse engineer any software or other programs provided to such party by the other in connection herewith.

(b)

The Fund Web Site and IAM System may contain certain intellectual property, including, but not limited to, rights in copyrighted works, trademarks and trade dress that is the property of the other party. Each party retains all rights in such intellectual property that may reside on the other party’s web site, not including any intellectual property provided by or otherwise obtained from such other party. To the extent the intellectual property of one party is cached to expedite communication, such party grants to the other a limited, non-exclusive, non-

transferable license to such intellectual property for a period of time no longer than that reasonably necessary for the communication. To the extent that the intellectual property of one party is duplicated within the other party’s web site to replicate the “look and feel,” “trade dress” or other aspect of the appearance or functionality of the first site, that party grants to the other a limited, non-exclusive, non-transferable license to such intellectual property for the duration of this Exhibit B. This license is limited to the intellectual property needed to replicate the appearance of the first site and does not extend to any other intellectual property owned by the owner of the first site. Each party warrants that it has sufficient right, title and interest in and to its web site and its intellectual property to enter into these obligations, and that to its knowledge, the license hereby granted to the other party does not and will not infringe on any U.S. patent, United States copyright or other United States proprietary right of a third party.

(c)

Each of the parties hereto agrees that the nonbreaching party would not have an adequate remedy at law in the event of the other party’s breach or threatened breach of its obligations under Sections 5(a) or 5(b) of this Exhibit B and that the nonbreaching party would suffer irreparable injury and damage as a result of any such breach. Accordingly, in the event either party breaches or threatens to breach the obligations set forth in Sections 5(a) or 5(b) of this Exhibit B, in addition to and not in lieu of any legal or other remedies a party may pursue hereunder or under applicable law, each party hereto hereby consents to the granting of equitable relief (including the issuance of a temporary restraining order, preliminary injunction or permanent injunction) against it by a court of competent jurisdiction, without the necessity of proving actual damages or posting any bond or other security therefor, prohibiting any such breach or threatened breach. In any proceeding upon a motion for such equitable relief, a party’s ability to answer in damages shall not be interposed as a defense to the granting of such equitable relief. The provisions of this Section 5(c) shall survive termination of the Agreement and the provision of services set forth in this Exhibit B.

Representation and Warranty . Neither party shall knowingly insert into any interface, other software, or other program provided by such party to the other hereunder, or accessible on IAM System or Fund Web Site, as the case may be, any “back door,” “time bomb,” “Trojan Horse,” “worm,” “drop dead device,” “virus” or other computer software code or routines or hardware components designed to disable, damage or impair the operation of any system, program or operation hereunder. For failure to comply with this warranty, the non-complying party shall immediately replace all copies of the affected work product, system or software. All costs incurred with replacement including, but not limited to, cost of media, shipping, deliveries and installation shall be borne by such party.

7.	Liability Limitations; Indemnification .

(a)

The Internet . Each party acknowledges that the Internet is an unsecured, unstable, unregulated, unorganized and unreliable network, and that the ability of the other party to provide or perform services or duties hereunder is dependent upon the Internet and equipment, software, systems, data and services provided by various telecommunications carriers, equipment manufacturers, firewall providers, encryption system developers and other vendors and third parties. Each party agrees that the other shall not be liable in any respect for the functions or malfunctions of the Internet. Each party agrees the other shall not be liable in any respect for the actions or omissions of any third party wrongdoers (i.e., hackers not employed by such party or

its affiliates) or of any third parties involved in the IAM Services and shall not be liable in any respect for the selection of any such third party, unless such party selected the third party in bad faith or in a grossly negligent manner.

(b)

PNC’s Explicit Disclaimer of Certain Warranties . EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 2—4 OF THIS EXHIBIT B, ALL SOFTWARE AND SYSTEMS DESCRIBED IN THIS EXHIBIT B ARE PROVIDED “AS-IS” ON AN “AS-AVAILABLE” BASIS, AND PNC HEREBY SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.

(c)

Cross-Indemnity . Each party hereto agrees to indemnify, defend and hold harmless the other party and its affiliates (and their respective officers, directors, agents and employees) from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, attorneys’ fee and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) (“Liabilities”) arising in connection with any claims that any IAM Services or related work product infringes any proprietary or other rights or any infringement claim against any of such persons based on the party’s intellectual property licensed to the other party hereunder (provided the other party has used such intellectual property in conformity with the product guidelines), except to the extent such Liabilities result directly from the gross negligence or knowing or willful misconduct of the other party or its related indemnified parties. PNC’s responsibility to indemnify, defend and hold harmless shall not apply to any infringement claim related to (i) any modification or customization of the IAM Services made at the request or direction of the Fund, (ii) any modification or alteration of the IAM Services by anyone other than PNC, (iii) PNC’s compliance with the instructions or requests of the Fund relating to IAM Services or the services set forth in this Exhibit B, (iv) any combination of the IAM Services with any item(s), service(s), process(es) or data not authorized by PNC, (v) any marketing of the IAM Services for the benefit of third parties, (vi) the use of any open source software, or (vii) requirements, specifications or designs of the Fund. The provisions of this Section 7(c) shall survive termination of the Agreement and the provision of services set forth in this Exhibit B.

8.	Miscellaneous .

(a)

Independent Contractor . The parties hereto are and shall remain independent contractors, and nothing herein shall be construed to create a partnership or joint venture between them and none of them shall have the power or authority to bind or obligate the other in any manner not expressly set forth herein. Any contributions to IAM System by the Fund and any contributions to the Fund Web Site by PNC shall be works for hire pursuant to Section 101 of the Copyright Act.

(b)

Conflict with Agreement . In the event of a conflict between specific terms of this Exhibit B and the Agreement, this Exhibit B shall control as to IAM Services.

EXHIBIT C

WRAP PROCESSING SERVICES

Transmit to the Fund purchase, redemption and related instructions and facilitate money settlement with respect to the Omnibus Accounts, which shall be registered as “PNC F/B/O Client Wrap Programs and their Customers” or “PNC F/B/O Client Wrap Programs,” as appropriate. Such activities shall be performed as set forth in the attached Schedule 1 of Exhibit C.

2.	Facilitate payment to Wrap Program Participants of the proceeds of redemptions, dividends and other distributions.

Coordinate with a third party print mail provider, and at the request of the Fund, provide that third party with such information as is necessary for it to mail to Wrap Program Participants, among other things: (a) periodic account statements, (b) 1099R documentation, and (c) proxies, prospectus supplements, and annual reports of the Fund, all as are provided by the Fund.

4.	Reconcile share positions for each Wrap Program and upon request provide certification to the Fund with respect thereto. In connection therewith, the Fund shall provide to PNC daily confirmation of all trade activity and share positions for the Omnibus Account.

5.	Maintain records for each Wrap Program Participant which shall reflect shares purchased and redeemed, as well as account and share balances.

Act as service agent in connection with dividend and distribution functions; perform shareholder account and administrative agent functions in connection with the issuance, transfer, and redemption or repurchase of Fund Shares. PNC shall create and maintain all records required of it pursuant to its duties under Section 14(p) of the Agreement and this Exhibit C and as set forth in this Exhibit C pursuant to applicable laws, rules and regulations, including records required by Section 31(a) of the 1940 Act. Where applicable, such records shall be maintained for the periods and in the places required by rule 31a-2 under the 1940 Act.

SCHEDULE 1 OF EXHIBIT C

On each day the New York Stock Exchange (the “Exchange”) is open for business (each, a “Business Day”), PNC or its agents may receive trade instructions with respect to the Wrap Programs and/or Wrap Program Participants for the purchase or redemption of shares of the Portfolios (“Trade Instructions”). Trade Instructions received in good order and accepted by PNC or its agents prior to the close of regular trading on the Exchange (the “Close of Trading”) on any given Business Day and transmitted to the Fund (i) by 11:59 p.m. Eastern Time if automated, and (ii) by 6:00 p.m. Eastern Time if manual on such Business Day will be executed by the Fund at the net asset value determined as of the Close of Trading on such Business Day. Any Trade Instructions received by PNC, or its agents, on such day but after the Close of Trading will be executed by the Fund at the net asset value determined as of the Close of Trading on the next Business Day following the day of receipt of such Trade Instructions. The day on which a Trade Instruction is executed by the Fund pursuant to the provisions set forth above is referred to herein as the “Effective Trade Date.”

Upon the timely receipt from PNC of the Trade Instructions described in the above paragraph, the Fund will execute the purchase or redemption transactions (as the case may be) with respect to each Wrap Program at the net asset value computed as at the Close of Trading on the Effective Trade Date. Such purchase and redemption transactions will settle on the Business Day next following the Effective Trade Date. Payments for net purchase and net redemption orders shall be made through the NSCC’s settlement process or by wire transfer by PNC (for net purchases) or by the Fund (for net redemptions) to the account designated by the appropriate receiving party on the Business Day following the Effective Trade Date. On any Business Day when the Federal Reserve Wire Transfer System is closed, all communication and processing rules will be suspended for the settlement of Trade Instructions. Trade Instructions will be settled on the next Business Day on which the Federal Reserve Wire Transfer System is open and the Effective Trade Date will apply.

In the event that PNC is in receipt of Trade Instructions in good order and is unable to transmit the Trade Instructions to the Fund by the above referenced deadlines, the Fund will accept the trades after such deadlines and before 10:00 a.m. Eastern Time on the day following the Effective Trade Date. PNC will furnish the Fund with an estimate of the net purchase or net redemption activity no later than 10:00 a.m. Eastern Time on the day following the Effective Trade Date. Payments for purchases and redemptions shall be made by wire transfer on the day following the Effective Trade Date.

March 29, 2010

- BLACKROCK FUNDS III

Re:

Transfer Agency Services Fees

Dear Sir/Madam:

This letter constitutes our agreement with respect to compensation to be paid to PNC Global Investment Servicing (U.S.) Inc. (“PNC”) under the terms of a Transfer Agency Agreement dated March 29, 2010 between BlackRock Funds III (“you” or the “Fund”) and PNC (the “Agreement”) for services provided on behalf of each of the Fund’s investment portfolios listed on Exhibit A to the Agreement (each a “Portfolio”). Pursuant to the Agreement, and in consideration of the services to be provided to each Portfolio, the Fund will pay PNC certain fees and reimburse PNC for its out-of-pocket and other expenses incurred on its behalf, as set forth below.

1)	Account Fee:


Open Direct Account		$ 16.00 per account per annum
Open NSCC Level III Accounts		$ 4.00 per account per annum
Closed Account:		$ 1.50 per account per annum

Fees shall be calculated and paid monthly based on one-twelfth (1/12th) of the annual fee. A closed account is defined as having a zero balance for more than 15 days and no dividend payable. Closed accounts are purged annually after year-end tax reporting.

2)	Annual Base Institutional Fee:

The annual base fee shall be $ 5,750 per Institutional CUSIP excluding BlackRock and Service class shares. Fees shall be calculated and paid monthly based on one-twelfth (1/12th) of the annual fee. This fee will be allocated based on net assets per CUSIP.

3)	Variable Series and Series Funds Fee: (N/A)

The annual base bee shall be $5,000 per Variable Series Portfolio. Fees shall be calculated and paid monthly based on one-twelfth (1/12th) of the annual fee.

4)	IRA Custodian Fee:


Active IRA Accounts:		$15.00 per social security number per annum*

5)	Annual Retirement Plan Document Fees:


IRA – Traditional (includes SEP)Active IRA Accounts:	$	500
IRA – Roth	$	500
IRA – Simple	$	500
Coverdell ESA	$	500

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Non-ERISA 403 (b) (7)	$	750
Money Purchase	$	750
Profit Sharing	$	750
EZ-k	$	750

6)	Transaction Charges:


Purchase/Redemption/Transfer/ Maintenance:		$ 2.00 per transaction (Waived)
Customer Service/Broker Phone Calls:		$ 5.00 per call (Waived)
New Account Opening:		$ .40 per account (electronic interface) (Waived)
		$ 5.00 per account (paper) (Waived)
12b-1 calculation:		$ .25 per account (per annum) (Waived) -
Checkwriting:		$ 1.85 per account with check writing (per annum)
		$ .10 per check transaction (non-return of checks)
		$12.50 each—stop payments*
		$15.00 each—non-sufficient funds*
		$ 2.50 each — check copy*
Wires (receipt/disbursement; international/domestic)		$ 7.50 per wire*
ACH Transaction:		$ .20 per item
Returned purchase check:		$20.00 each*

*May be paid by the shareholder.

7)	*PNC FundDSERV/Networking Fees:**


PNC Setup fee:		$ 2,000.00 One-time Setup charge per fund family (PNC and Fund acknowledge these amounts have been paid)
PNC Transaction fees:
NSCC FundSERV		$.10 per transaction $.15 per transaction, if the trade is confirmed the same day
Commission Settlement:		No charge
ACATS:		No charge
Mutual Fund Profile Service:		$10.00 per month per fund/class

*FundSERV Networking fees will not exceed $20,000 per month.

Note: NSCC will deduct its direct monthly fee on the 15th of each month from PNC’s cash settlement that day. PNC will include these charges as an out-of-pocket expense on its next invoice. PNC will not charge a Transaction fee on trades via the NSCC-like

-2-

8)	Anti-Money Laundering Fee:

The anti-money laundering fee shall be $0.15 per open non-network level III account per year, not to exceed $1,500 per month.

9)	Customer Identification Program (CIP)

$2.25 per new customer verification. (Applicable to new non-network level III accounts only.)

$0.24 per CIP result stored in the database per year. (Results are stored for a maximum of 5 years.)

10)

Training:

$150 per hour, per resource

11)

Voice Response:


(Average monthly call volume <2,000)		$10,000
One Time Set-Up Fee:
Monthly Maintenance Fee:		$1,000
Per Minute Fee:		$0.23
Per Call Fee:		$0.10

(Average monthly call volume > 2,000)		$10,000
One Time Set-Up Fee:
Monthly Maintenance Fee:		$500
Per Minute Fee:		$0.23
Per Call Fee:		$0.10

12)

Cost Basis Accounting:


One-time set-up charge:		$50,000
Full Service:		$0.15 per eligible account per month
Network Level III Accounting:		$0.35 per eligible account per year

13)

E-Delivery Fees: (if applicable)


One-time set-up fee		$5,000 (Waived)

Monthly Maintenance Fee:		$1,000

E-Delivery Base Transmission Fee/Record:

Price records		$0.015
Other records		$0.030
(security, distribution, account master, transaction, position)

-3-


E-DeliveryDirect/Interactive/Trust/401K/ICUMgt. Co. Level Fee/Record:

Price records		$0.05
Other records		$0.01
(security, distribution, account master, transaction, position)

Enhancement Fee:		$175.00/hour

The aggregate Fees are not to exceed $20,833.33 per month.

14)

Electronic provision of monthly statement information from PNC’s OEP institutional transfer agency system (“OEP System”):

(N/A)

$300.00 per month

15)

E-Presentment of Quarterly Statements: (N/A)


Implementation fee:	Waived
PDF conversion:	1 million Images or less	$0.05 per Image
	1 million-3 million Images	$0.04 per Image
PDF storage:		$0.01 per Image

16)

Internet Account Management Services—Retail:

One Time Set-Up Fee (PNC and Fund acknowledge that these amounts have been paid)


Number of Accounts (counted at implementation)		Set-Up Fee
Less than 20,000 Accounts		$15,000
Between 20,001 and 50,000 Accounts		$20,000
Between 50,001 and 100,000 Accounts		$25,000
Between 100,001 and 500,000 Accounts		$30,000
Between 500,001 and 1,000,000 Accounts		$40,000
Over 1,000,000 Accounts		$50,000

Annual Recurring Fee—Starts in Year 1:


Number of Accounts ¹		Annual Fee
Less than 20,000 Accounts		$10,500
Between 20,001 and 50,000 Accounts		$14,000
Between 50,001 and 100,000 Accounts		$17,500
Between 100,001 and 500,000 Accounts		$21,000
Between 500,001 and 1,000,000 Accounts		$28,000
Over 1,000,000 Accounts		$35,000

¹ Counted at implementation and then at each subsequent anniversary date from the date of implementation. Annual fee will be adjusted each year (if adjustment is applicable).

-4-

Monthly Minimums:


Number of Accounts	Inquiry Minimum		Transaction Minimum
Less than 20,000 Accounts	$	1,200	$	120
Between 20,001 and 50,000 Accounts	$	1,600	$	160
Between 50,001 and 100,000 Accounts	$	2,000	$	200
Between 100,001 and 500,000 Accounts	$	2,600	$	260
Between 500,001 and 1,000,000 Accounts	$	3,200	$	320
Over 1,000,000 Accounts	$	4,000	$	400

17)

Inquiry / Transaction / Account Maintenance/ New Account Set-Up Fees:

The fee for an Account Inquiry is $0.10 per occurrence. For an Account Transaction, the fee is $0.50 per occurrence. The fee for Account Maintenance is $1.00 per occurrence. The fee for New Account Set-Up is $1.50 per occurrence. These fees are tracked and billed monthly. A minimum monthly fee applies (as set forth above) for both inquiries and transactions.

Volume Discount for Inquiries:


(Over life of the Agreement) Number of Inquiries		Fee per Inquiry
Less than 100,000 Inquiries		$0.10
Between 100,001 and 200,000 Inquiries		$0.08
Between 200,001 and 300,000 Inquiries		$0.05
Over 300,000 Inquiries		$0.03

Other Fees:

Customization Fee: $175 per hour - $225 per hour, depending upon technical resources needed

18)

Data Repository and Analytic Suite— $120,000 per annum, 10,000 per month for up to 25 IDs $400 one time license fee (for IDs over 25) and $100 annual maintenance fee (for IDs over 25)

19)

Customer Management Suite License Fees:

First 30 seats at $4,300 per seat per annum

Next 30 seats at $4,000 per seat per annum

Over 60 seats at $3,700 per seat per annum

-5-

20)

COLD (Computer Output to Laser Disk) Storage*:

$10,000 on time license fee plus

$.009 per page

*COLD Storage fees will not exceed $58,000 per month.

21)

Disaster Recovery Services: N/A

One Time Facility/Technology Set Up Fee $ 50,000

Includes preparation of 18 workstations/call center seats, desktop PC’s and provisioning of ACD and any related VRU configuration to enable the receipt and routing of BlackRock calls delivered to PNC via toll-free allocation.


Service Access Fee		$250/seat/month ($4,500/month for 18 seats)

Includes provision of seats for agents equipped with an ACD set, fully operational desktop with BlackRock required applications, recorded lines, and typical office workstation supplies.


Use of Seats/Workstations		$3,200/event
Disaster Recovery Testing		$3,200/event
Call Routing/Related Testing Changes		$250 per change

22)

Dedicated Team/Programming Charges

1 ^st FTE Resource (2000 hrs/yr) @ $125,000 per annum

2 ^nd FTE Resources (2000 hrs/yr) no charge

3 ^rd and 4 ^th FTE Resources (2000 hrs/yr) @ $150,000 per FTE/per annum

Additional programming required to be charged at a rate of $175-$225/hr depending upon technical requirements. Support of the Merrill Lynch Brokerage proprietary “NSCC-Like” interface will be borne by the dedicated team. The BlackRock Funds acknowledge that coding and support of NSCC Important notices must and shall take priority over other initiatives being developed by the dedicated team.

23)

Advanced Output Solutions: (see the attached print mail schedule)

24)

Miscellaneous Charges include, but are not limited to, charges for the following products and services as applicable: ad hoc reports, ad hoc SQL time, banking services, COLD storage, digital recording, training, microfiche/microfilm production, magnetic media tapes and freight, pre-printed stock (including business forms, certificates, envelopes, checks and stationary), consolidated statement charges, audio response charges, negotiated time and materials for development and programming costs and conversion and deconversion expenses (unless otherwise agreed).

-6-

25)

Out-of-Pocket Expenses include, but are not limited to: telephone lines, postage, overnight delivery, mailgrams, hardware/phone lines for data transmissions and remote terminal(s), wire fees, ACH charges, exchange fee, record retention and storage, b/c notices, account transcripts, labels, user tapes, travel expenses, and expenses incurred at the direction of the Fund. Out-of-pocket expenses are billed as they are incurred.

26)

Shareholder Expenses include, but are not limited to: IRA/Keogh processing, exchange fees between Portfolios, requests for account transcripts, returned checks, lost certificate bonding, overnight delivery as requested by the shareholder, and wire fee for disbursement if requested by the shareholder. Shareholder expenses are billed as they are incurred.

27)

Service Account Investment Earnings/Balance Credits/Third-Party Vendor Redemption and Distribution Check Float: In connection with compensation that PNC earns each month from Service Accounts (as defined in the Agreement) and third-party check vendor accounts, PNC agrees to pay to the Fund each month with respect to such compensation: (a) one hundred percent (100%) of the investment earnings and balanced credits earned on Service Accounts less PNC’s funding expense for Service Account overdrafts; and (b) ninety percent (90%) of the redemption and distribution check account daily balances held by the third-party check vendor multiplied by the current U.S. Treasury Bill rate less thirty (30) basis points (i.e., 90% of account daily balances x (T-Bill – 30 basis points)).

The fee for the period from the date hereof until the end of the year shall be prorated according to the proportion, which such period bears to the full annual period.

Each party hereto is represented by counsel, and no presumptions shall arise favoring any party by virtue of the authorship of any provision of this letter.

-7-

If the foregoing accurately sets forth our agreement and you intend to be legally bound hereby, please execute a copy of this letter and return it to us.


Very truly yours,
PNC GLOBAL INVESTMENT SERVICING (U.S.) INC.

By:

Name:

Title:



Business Approval:


Agreed and Accepted:

BLACKROCK FUNDS III

BlackRock Funds III

By:

Name:

Title:

-8-

BlackRock Funds III

Advanced Output Solutions

Print./ Mail Pricing Schedule


A.	Daily/Monthly/Quarterly/Annual Statement Output

	DATA PROCESSING/PRINTING/INSERTING
	¡ Simplex Periodic Statements	$0.105/Simplex Page
	¡ Duplex Periodic Statements	$0.14/Duplex Page
	¡ Dealer/Rep Pages	$0.050/Simplex Page
	¡ 12b1, Commission Check Processing	$0.11/Simplex Page
	¡ Redemption/Replacement/Dividend/SWP Check Processing	$0.11/Simplex Page
	¡ Inserting Additional Inserts	$0.018/Insert
	¡ Work Order Administration fee	$15.00 Each
	¡ Print Images	$0.06 Each

B.	Shipping / Inventory

	¡ Non-USPS courier support / package	$4.50
	¡ Inventory dumps / S.K.U.	$20.00
	¡ Inventory receipts / S.K.U.	$20.00
	¡ Inventory storage / location / month – per skid	$20.00
	¡ Disaster Recovery Storage monthly	$15.00
	¡ Courier Charge	Cost
	¡ Shipping Boxes	$0.85 Each
	¡ Oversized Envelopes	$0.45 Each
	¡ Pressure Sensitive Labels	$0.20 Each
	¡ Affix Labels / each	$0.10 ($125 min)
	¡ Per Piece Pre-Sort Fee	$0.035

C.	Misc. Fees

	¡ Manual pulls	$3.50 Each
	¡ Special Projects Hourly Work	$30.00

D.	Special Mailings

	¡ Work Order Administration fee	$15.00 Each
	¡ Creation of Admark Tape	$115.00
	¡ Household Accounts	$6.00/K
	¡ ZIP+4 Data Enhancement	$0.008 Each ($50 min)
	¡ Adhoc Programming	$100.00 per hour
	¡ Data Manipulation	$70.00 per hour
	¡ Admark Self Mailer	$0.03 Each ($75 min)
	¡ Admark & Machine Insert #10 or 6x9 (includes 1 piece)	$0.050 Each ($75 min)
	¡ Additional Machine Insert #10 or 6x6	$0.02 Each
	¡ Admark & Machine Insert 9x12 (includes 1 piece)	$0.11 Each ($100 min)
	¡ Additional Machine Insert 9x12	$0.05 Each
	¡ Admark Only #10, 6x9 or 9x12	$0.032 Each ($75 min)
	¡ Admark & Hand insert #10, 6x9 (includes 1 insert)	$0.061 Each ($75 min)

-9-


	¡ Admark & Hand Insert 9x12 (includes 1 insert)	$0.07 Each ($100 min)
	¡ Hand Sort	$0.025 Each
	¡ Print, Affix & Insert 1 piece Pressure Sensitive labels	$0.25 Each ($50 min)
	¡ Print Labels only	$0.08 Each
	¡ Affix Labels only each per mailing	$0.08 Each ($75 min)
	¡ Additional inserts	$0.018/Insert
	¡ Legal Drop per Mailing	$125.00
	¡ Copy of 3602 or 3606 per Mailing	$3.00 Each
	¡ Tabbing
	¡ 1 Tab	$8.00/K
	¡ 2 Tabs	$12.00/K

F.	Year End Tax Form Output Processing

	¡ Print/Process	$0.25 Each
	¡ Work Order Fee	$15.00 Each
	¡ Minimum Processing/Job	$75.00 Each
	¡ Pulls	$2.50 Each
	¡ Presort Fee	$0.035 Each
	¡ Affidavit Charge	$3.50 Each
	¡ Duplicate Tax Forms	$0.50 Each
	¡ Intelligent Inserting	$0.045 Each
	¡ Additional Machine Inserts	$0.018 Each
	¡ Additional Hand Inserts	$0.06 Each

G.	Other Tax/Compliance Mailings

	¡ Duplex Print	$0.105 Each
	¡ Simplex Print	$0.085 Each
	¡ Affidavit Charge	$3.50 Each
	¡ Machine Insert	$56.00/K
	¡ Hand Insert	$65.00/K
	¡ Machine Folding	$18.00/K
	¡ Custom Folding	$0.12 Each
	¡ Additional Machine Inserts	$0.018 Each
	¡ Additional Hand Inserts	$0.06 Each
	¡ Work Order Fee	$15.00 Each
	¡ Minimum Processing/Job	$75.00
	¡ Pulls	$3.50 Each
	¡ Presort Fee	$0.035 Each

E.	Digital Services

	¡ PDF Conversion and Server Storage of images	$0.0198 per image
	¡ Original CD-ROM Charges	$225.00 per CD
	¡ Duplicate CD-ROM Charge	$175.00 per CD
	¡ E-Notification Event Fee (Stmts, AR, SAR, etc.)	$500.00 per event
	¡ E-Mail Notifications	$0.10 per E-Mail
	¡ Handling / Processing of Rejected E-Mails	$5.00 per reject

-10-

[End of Schedule]

-11-

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated February 22, 2013 relating to the financial statements and financial highlights which appears in the December 31, 2012 Annual Report to Shareholders of BlackRock Cash Funds: Government, BlackRock Cash Funds: Institutional, BlackRock Cash Funds: Prime, BlackRock Cash Funds: Treasury a series of the BlackRock Funds III, which are also incorporated by reference into the Registration Statement.

We also consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated February 22, 2013, relating to the financial statements which appear in the December 31, 2012 Annual Report to Interest holders of the Government Money Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio, Treasury Money Market Master Portfolio, each a portfolio of Master Investment Portfolio, which are also incorporated by reference into the Registration Statement.

We also consent to the references to us under the headings “Financial Highlights” and “Independent Registered Public Accounting Firm” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 26, 2013

Exhibit 13(a)

AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN

May 16, 2012

This Amended and Restated Distribution and Service Plan (the “Plan”) has been adopted in accordance with Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940, as amended (the “1940 Act”), by BlackRock Funds III, a Delaware statutory trust (the “Fund”), with respect to the various classes of shares (each, a “Class”) of the portfolios of the Fund listed on Appendix A hereto (each, a “Portfolio”), as amended from time to time, subject to the terms and conditions set forth herein. This Plan replaces the prior Distribution Plan, dated February 22, 2010 (the “Prior Distribution Plan”), with respect to the Portfolios. The Service Fees payable pursuant to the Plan are fees payable for the administration and servicing of shareholder accounts, as more fully described in Section 2 below, and not costs which are primarily intended to result in the sale of the Fund’s shares and which would require approval pursuant to the Rule.

1.	Distribution Fees

a. Pursuant to the Plan, the Fund may pay to (i) BlackRock Investments, LLC or any entity that may in the future act as a distributor for its shares (collectively, the “Distributor”), and/or (ii) BlackRock Fund Advisors, BlackRock Advisors, LLC or any affiliate, including The PNC Financial Services Group, Inc. (“PNC”) and its affiliates, and to Merrill Lynch & Co., Inc. (“Merrill Lynch”) and its affiliates (collectively, “Companies”), with respect to and at the expense of each Class of each Portfolio listed on Appendix A hereto, a fee for distribution and sales support services, as applicable, and as more fully described in Section 1(b) hereof (the “Distribution Fee”), such fee in the aggregate to be at the annual rate specified with respect to such Class of such Portfolio under the column “Distribution Fee” on Appendix A hereto.

b. Payments of the Distribution Fee under the Plan shall be used primarily to compensate the Distributor for distribution services and sales support services provided, and/or the Companies for sales support services provided, in connection with the offering and sale of shares of the applicable Class of the applicable Portfolio, and to reimburse the Distributor and/or the Companies for related expenses incurred, including payments by the Distributor and/or the Companies to compensate or reimburse brokers, dealers, other financial institutions or other industry professionals (collectively, “Selling Agents”), for sales support services provided and related expenses incurred by such Selling Agents. The services and expenses described in this Section 1(b) may include, but are not limited to, the following: (i) the development, formulation and implementation of marketing and promotional activities, including direct mail promotions and television, radio, magazine, newspaper, electronic and other mass media advertising; (ii) the preparation, printing and distribution of prospectuses and reports (other than prospectuses or reports used for regulatory purposes or for distribution to existing shareholders); (iii) the preparation, printing and distribution of sales literature; (iv) expenditures for sales or distribution support services such as for telephone facilities and in-house telemarketing; (v) preparation of information, analyses and opinions with respect to marketing and promotional activities; (vi) commissions, incentive compensation or other compensation to, and expenses of, account executives or other employees of the Distributor, the Companies or Selling Agents, attributable to distribution or sales support activities, as applicable, including interest expenses and other costs associated with financing of such commissions, compensation and expenses; (vii) travel, equipment, printing, delivery and mailing costs, overhead and other office expenses of the Distributor, the Companies or Selling Agents, attributable to distribution or sales support activities, as applicable; (viii) the costs of administering the Plan; (ix) expenses of organizing and conducting sales seminars; and (x) any other costs and expenses relating to distribution or sales support activities.

c. Payments of the Distribution Fee on behalf of a particular Portfolio must be in consideration of services rendered for or on behalf of such Portfolio. However, joint distribution or sales support financing with respect to the shares of the Portfolios (which financing may also involve other investment portfolios or companies that are affiliated persons of such a person, or affiliated persons of the Distributor or the Companies) shall be permitted in accordance with applicable law. Payments of the Distribution Fee under Section 1 of the Plan may be made without regard to expenses actually incurred.

d. It is acknowledged that the Distributor, the Companies and other parties that receive fees from the Fund may each make payments without limitation as to amount relating to distribution or sales support activities, as applicable, in connection with each Class of each Portfolio out of its past profits or any additional sources other than the Distribution Fee which are available to it.

2.	Service Fees

a. Pursuant to the Plan, the Fund shall pay, with respect to and at the expense of each Class of each Portfolio listed on Appendix A hereto, a fee in respect of the provision of personal services to shareholders of such Class of such Portfolio, as more fully described in Section 2(b) hereof (the “Service Fee”), such fee to be at the annual rate specified with respect to such Class of such Portfolio under the column “Service Fee” on Appendix A hereto. The Fund shall determine the amount of the Service Fee to be paid to one or more brokers, dealers, other financial institutions or other industry professionals (including the Companies) (collectively, “Service Agents”) and the basis on which such payments will be made. Payments to a Service Agent will be subject to compliance by the Service Agent with the terms of any related Plan agreement entered into by the Service Agent.

b. Payments of the Service Fee shall be used to compensate Service Agents for general shareholder liaison services provided with respect to shareholders in the related Class of the related Portfolio, including, but not limited to, (i) answering shareholder inquiries regarding account status and history, the manner in which purchases, exchanges and redemptions of shares may be effected and certain other matters pertaining to the shareholders’ investments; and (ii) assisting shareholders in designating and changing dividend options, account designations and addresses.

c. Payments of the Service Fee under Section 2 of the Plan may be made without regard to expenses actually incurred.

3.	Calculation and Payment of Fees

The amount of the Distribution Fee and Service Fee payable with respect to each Class of each Portfolio listed on Appendix A hereto shall be calculated daily and paid monthly, at the applicable annual rates indicated on Appendix A. The Distribution Fee and Service Fee shall be calculated and paid separately for each Class of each Portfolio.

4.	Approval of Plan

The Plan will become effective immediately, as to any Class of any Portfolio, upon its approval by (a) a majority of the Board of Trustees, including a majority of the trustees who are not “interested persons” (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements entered into in connection with the Plan, pursuant to a vote cast in person at a meeting called for the purpose of voting on the approval of the Plan, and (b) with respect to Section 1 of the Plan only, a majority of the outstanding shares of such Class of such Portfolio.

5.	Continuance of the Plan

The Plan will continue in effect for so long as its continuance is specifically approved at least annually by the Fund’s Board of Trustees in the manner described in Section 4 above.

6.	Additional Classes and Portfolios

The Plan shall become effective with respect to Classes of Portfolios not currently listed on Appendix A hereto upon obtaining the requisite approvals with respect to such Classes of Portfolios in accordance with Section 4 above.

7.	Termination

The Plan may be terminated at any time with respect to any Class of any Portfolio without penalty by (a) a vote of a majority of the Trustees who are not “interested persons” (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements entered into in connection with the Plan, or (b) a vote of a majority of the outstanding shares of such Class of such Portfolio. The termination of the Plan with respect to any Class of any Portfolio shall not result in the termination of the Plan with respect to any other Class of that Portfolio or any other Portfolio.

8.	Amendments

The Plan may not be amended with respect to any Class of any Portfolio so as to increase materially the amount of the Distribution Fee described in Section 1 above with respect to such Class of such Portfolio unless the amendment is approved by a vote of at least a majority of the outstanding shares of such Class of such Portfolio and otherwise complies with Rule 18f-3(d) under the 1940 Act or any successor provision as in effect at the time of such amendment. In addition, no material amendment to the Plan may be made unless approved by the Fund’s Board of Trustees in the manner described in Section 4 above.

9.	Selection of Certain Trustees

While the Plan is in effect, the selection and nomination of the Fund’s Trustees who are not “interested persons” of the Fund (as defined in the 1940 Act) will be committed to the discretion of the Trustees then in office who are not “interested persons” (as so defined) of the Fund.

10.	Written Reports

While the Plan is in effect, the Fund’s Board of Trustees shall receive, and the Trustees shall review, at least quarterly, written reports complying with the requirements of the Rule, which set out the amounts expended under the Plan and the purposes for which those expenditures were made.

11.	Preservation of Materials

The Fund will preserve copies of the Plan, any agreement relating to the Plan and any report made pursuant to Section 10 above, for a period of not less than six years (the first two years in an easily accessible place) from the date of the Plan, agreement or report.

12.	Miscellaneous

The captions in the Plan are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

APPENDIX A TO DISTRIBUTION AND SERVICE PLAN


Name of Portfolio	Class of Shares	Distribution Fee (expressed as a percentage of average daily net assets of the Portfolio attributable to the specified Class)	Service Fee (expressed as a percentage of average daily net assets of the Portfolio attributable to the specified Class)
LifePath Retirement Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2020 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2025 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2030 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2035 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2040 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2045 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2050 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
LifePath 2055 Portfolio	Investor A	—	0.25%
	Class R	0.25%	0.25%
	Investor C	0.75%	0.25%
BlackRock Bond Index Fund	Investor A	—	0.25%
BlackRock CoreAlpha Bond Fund	Investor A	—	0.25%
	Investor C	0.75%	0.25%
BlackRock S&P 500 Stock Fund	Investor A	—	0.25%
	Investor A1	—	0.15%
	Investor B	0.75%	0.15%
	Investor C1	0.75%	0.15%
	Service	—	0.15%

Amended as of May 16, 2012

Exhibit 14(a)

BLACKROCK FUNDS III

AMENDED AND RESTATED

RULE 18f-3 MULTI-CLASS PLAN

I.	Introduction.

Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the “1940 Act”), this Amended and Restated Rule 18f-3 Multi-Class Plan (the “Plan”) sets forth the method for allocating fees and expenses among each class of shares in the separate investment portfolios (the “Funds”) of BlackRock Funds III (the “Trust”). In addition, the Plan sets forth the distribution fees, administration fees (including shareholder servicing fees and processing fees), minimum investments, maximum initial sales charges, contingent deferred sales charges (“CDSCs”), conversion features, exchange privileges and other features applicable to each class of shares of the Funds.

The Trust is an open-end series investment company registered under the 1940 Act, the shares of which are registered on Form N-1A under the Securities Act of 1933, as amended. The Trust hereby elects to offer multiple classes of shares of the Funds pursuant to the provisions of Rule 18f-3 and the Plan. Appendix A, as it may be amended from time to time, lists the series of the Trust that operate pursuant to Rule 2a-7 under the 1940 Act as money market funds (the “Money Market Funds”) that have approved the Plan and the classes of each such Money Market Fund. Appendix B, as it may be amended from time to time, lists the non-Money Market Funds of the Trust that have approved the Plan and the classes of each such non-Money Market Fund.

II.

Allocation of Expenses.

A. Mandatory Class Expenses . Pursuant to Rule 18f-3 under the 1940 Act, the Trust allocates to each class of shares of a Fund: (i) any fees and expenses incurred by the Fund in connection with the distribution or servicing of such class of shares under a distribution plan or services plan adopted for such class of shares pursuant to Rule 12b-l under the 1940 Act; and (ii) any fees and expenses under the Fund’s shareholder servicing plan or its shareholder servicing and processing plan in connection with the provision of shareholder servicing and/or processing services to the holders of such class of shares (which fees and expenses are payable by BlackRock Advisors, LLC, each Fund’s administrator (the “Administrator”), pursuant to the applicable Administration Agreements between the Trust and the Administrator.

B. Discretionary Class Expenses . In addition, pursuant to Rule 18f-3, the Trust may allocate the following fees and expenses to a particular class of shares of a Fund:

(i)

transfer agent fees identified by the transfer agent as being attributable to such class of shares;

(ii)

printing and postage expenses related to preparing and distributing materials such as shareholder reports, notices, prospectuses, reports, and proxies to current shareholders of that class or to regulatory agencies with respect to such class of shares;

(iii)

blue sky notification or other filing fees incurred with respect to such class of shares;

(iv)

Securities and Exchange Commission registration fees incurred with respect to such class of shares;

(v)

the expense of administrative personnel and services (including, but not limited to, those of a portfolio accountant, custodian or dividend paying agent charged with calculating net asset values or determining or paying dividends) as required to support the shareholders of such class of shares;

(vi)

litigation or other legal expenses incurred with respect to such class of shares;

(vii)

fees of the Trust’s Trustees incurred with respect to matters affecting such class of shares;

(viii)

independent accountants’ fees incurred with respect to such class of shares; and

(ix)

any other fees and expenses, not including advisory or custodial fees or other expenses related to the management of the Fund’s assets, incurred with respect to such class of shares.

For all purposes under this Plan, fees and expenses incurred “with respect to” a class of shares are those fees and expenses that are actually incurred in a different amount by the class or that relate to a different kind or degree of services provided to the class.

Notwithstanding any other provision of this Plan, the Trust, as contemplated by Subsection II.B, allocates to each class of shares of a Fund administration fees incurred pursuant to the Administration Agreement with respect to such class based on fees and expenses that are actually incurred in a different amount by the class or that relate to a different kind or degree of services provided to the class, as described in Section III below.

C. Relative Net Asset Value Allocation . Income, realized and unrealized capital gains and losses, and any expenses of a Fund not allocable to a particular class of the Fund pursuant to this Plan shall be allocated to each class of the Fund based upon the relative net asset value of that class in relation to the aggregate net asset value of the Fund.

D. Waivers and Reimbursements . In certain cases, a service provider for a Fund may waive or reimburse all or a portion of the expenses of a specific class of shares of the Fund. The Board of Trustees of the Trust will monitor any such waivers or reimbursements to ensure that they do not generate inappropriate cross-subsidization between classes.

III.

Class Arrangements.

Appendix A and Appendix B summarize the various features applicable to a particular class of shares of each Fund, including, where applicable, Rule 12b-l distribution fees, administration fees (including shareholder servicing fees and processing fees), investment minimums, maximum initial sales charges, CDSCs, conversion features and exchange privileges. In view of the different scale and cost of meeting servicing demands for accounts that vary by

size or type ( e.g. , retirement plans) and differing arrangements offered by intermediaries for different types of accounts ( e.g. , omnibus v. direct accounts), the administration fees (including shareholder servicing fees and processing fees) and minimum initial investments vary among the classes of the Funds. In addition, in view of the distribution arrangements applicable to certain classes of the Funds ( e.g. , distribution to the retirement market), those classes of the Funds are subject to 12b-l fees as set forth in Appendix A and Appendix B. Additional details and restrictions regarding such fees, features, services and distribution arrangements are set forth in the relevant Fund’s current Prospectus and Statement of Additional Information. Except as set forth in this Plan or, with respect to voting, in the Trust’s Declaration of Trust, each class of shares of a Fund will have the same relative rights and privileges and be subject to the same fees and expenses.

IV.

Board Review.

The Board of Trustees of the Trust shall review the Plan as it deems necessary. Prior to any material amendment(s) to the Plan with respect to any Fund’s shares, the Trust’s Board of Trustees, including a majority of the Trustees that are not “interested persons” of the Trust (as defined in the 1940 Act), shall find that the Plan, as proposed to be amended (including any proposed amendments to the method of allocating class and/or fund expenses), is in the best interest of each class of shares of the Fund individually and the Fund as a whole. In considering whether to approve any proposed amendment(s) to the Plan, the Trustees of the Trust shall request and evaluate such information as they consider reasonably necessary to evaluate the proposed amendment(s) to the Plan.

Amended and approved by the Board of Trustees of BlackRock Funds III on May 17, 2011.

Amended and approved by the Board of Trustees of BlackRock Funds III on September 20, 2012.

Exhibit 14(b)

APPENDIX A

BlackRock Funds III
Money Market Funds

Maximum
12b-1 Fee

Administration
Fee

Maximum
Shareholder
Servicing Fee ¹

Maximum
Processing
Fee ¹

Minimum
Investment

Maximum
Initial Sales
Charge/CDSC

Conversion
Features/
Exchange
Privileges

BlackRock Cash Funds:

Institutional

Aon Captives Share Class

0.10%

0.05%

None

$500,000

None

Institutional Class

None

0.05%

None

$100 million

None

Capital Share Class

None

0.07%

None

$25 million

None

Premium Class

None

0.10%

None

$10 million

None

Select Class

None

0.15%

None

$1 million

None

SL Agency Share Class

None

0.02%

None

N/A ²

None

Trust Class

None

0.38%

0.25%

0.13%

$100,000

None

BlackRock Cash Funds:

Prime

Institutional Class

None

0.05%

None

$100 million

None

Capital Share Class

None

0.07%

None

$25 million

None

Premium Class

None

0.10%

None

$10 million

None

Select Class

None

0.15%

None

$1 million

None

SL Agency Share Class

None

0.02%

None

N/A ²

None

Trust Class

None

0.38%

0.25%

0.13%

$100,000

None

BlackRock Cash Funds:

Government

Institutional Class

None

0.05%

None

$100 million

None

Capital Share Class

None

0.07%

None

$25 million

None

Premium Class

None

0.10%

None

$10 million

None

Select Class

None

0.15%

None

$1 million

None

SL Agency Share Class

None

0.02%

None

N/A ²

None

Trust Class

None

0.38%

0.25%

0.13%

$100,000

None

BlackRock Cash Funds:

Treasury

Institutional Class

None

0.05%

None

$100 million

None

Capital Share Class

None

0.07%

None

$25 million

None

Premium Class

None

0.10%

None

$10 million

None

Select Class

None

0.15%

None

$1 million

None

SL Agency Share Class

None

0.02%

None

N/A ²

None

Trust Class

None

0.38%

0.25%

0.13%

$100,000

None

¹	All shareholder servicing fees and processing fees will be paid by the Funds’ administrator; so shareholders will not bear any of these fees in addition to the administration fee.

²	Although the SL Agency Shares do not have a minimum investment, they shall only be made available to clients of BlackRock Fund Advisors and its affiliates for the investment of securities lending collateral.

APPENDIX B

Each non-Money Market Fund of BlackRock Funds III may offer the following classes of shares: Investor A Shares; Investor A1 Shares; Investor C Shares; Investor C1 Shares; Service Shares; Institutional Shares; Class R Shares and Class K Shares.

Investor A Shares

Investor A Shares shall be available for purchase through securities brokers, dealers or financial institutions or through a Fund’s transfer agent, subject to restrictions described in its prospectus.

Investor A Shares shall be subject to a front-end sales charge at the rates (and subject to the reductions and exemptions) described in the Fund’s prospectus. When the aggregate offering price of Investor A Shares of the Funds purchased by an investor qualifies the investor to purchase such shares without paying a front-end sales charge, a contingent deferred sales charge may be imposed at the rates (and subject to the reductions and exemptions) described in the prospectus.

Investor A Shares of a Fund shall bear the expense of distribution, shareholder servicing and administration fees described in the prospectus, if any.

Distribution fees shall be payable to a Fund’s distributor and/or to BlackRock Fund Advisors or any other affiliate of PNC Bank, National Association or Merrill Lynch & Co., Inc. (collectively, “BlackRock Advisors”) primarily: (i) to compensate the distributor for distribution and sales support services and to reimburse the distributor for related expenses, including payments to brokers, dealers, other financial institutions or other industry professionals (collectively, “Selling Agents”) for sales support services; and (ii) to compensate BlackRock Advisors for sales support services and to reimburse BlackRock Advisors for related expenses, including payments to Selling Agents for sales support services. A Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Investor A Shares out of its past profits or any additional sources (other than distribution fees) which are available to it.

Shareholder servicing fees shall be payable to brokers, dealers, other financial institutions or other industry professionals (including BlackRock Advisors) (collectively, “Service Agents”) for general shareholder liaison services.

Administration fees shall be payable to a Fund’s administrator for supervising the Fund’s administrative operations and providing certain other administrative services reasonably necessary for the operation of the Fund. A Fund’s administrator may also pay third parties to provide such services.

Investor A1 Shares

Investor A1 Shares are to be issued in connection with certain business combinations and generally shall not be available for purchase by the general public. Additional Investor A1 Shares shall only be issued in connection with the reinvestment of dividends and other distributions. Investor A1 Shares of a Fund may be subject to a front-end or contingent deferred sales charge at the rates (and subject to the reductions and exemptions) described in the applicable prospectus.

Investor A1 Shares of a Fund shall bear the expense of distribution and shareholder servicing fees described in the prospectus, if any.

Distribution fees shall be payable to the Fund’s distributor and/or to BlackRock Advisors primarily: (i) to compensate the distributor for distribution and sales support services and to reimburse the distributor for related expenses, including payments to Selling Agents for sales support services; and (ii) to compensate BlackRock Advisors for sales support services and to reimburse BlackRock Advisors for related expenses, including payments to Selling Agents for sales support services. The Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Investor A1 Shares out of its past profits or any additional sources (other than distribution fees) which are available to it.

Shareholder servicing fees shall be payable to Service Agents for general shareholder liaison services.

Investor A1 Shares shall bear the expense of administration fees described in the prospectus, if any. Administration fees shall be payable to a Fund’s administrator for supervising the Fund’s administrative operations and providing certain other administrative services reasonably necessary for the operation of the Fund. A Fund’s administrator may also pay third parties to provide such services.

Investor C Shares

Investor C Shares shall be available for purchase through securities brokers, dealers or financial institutions or through a Fund’s transfer agent, subject to restrictions described in their prospectus. Investor C Shares generally shall be subject to a contingent deferred sales charge at the rates (and subject to the reductions and exemptions) described in their prospectus.

Investor C Shares shall bear the expense of distribution, shareholder servicing and administration fees described in a Fund’s prospectus, if any.

Distribution fees shall be payable to a Fund’s distributor and/or to BlackRock Advisors primarily: (i) to compensate the distributor for distribution and sales support services and to reimburse the distributor for related expenses, including payments to Selling Agents for sales support services; and (ii) to compensate BlackRock Advisors for sales support services and to reimburse BlackRock Advisors for related expenses, including payments to Selling Agents for sales support services. A Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Investor C Shares out of its past profits or any additional sources (other than distribution fees) which are available to it.

Shareholder servicing fees shall be payable to Service Agents for general shareholder liaison services.

Administration fees shall be payable to a Fund’s administrator for supervising a Fund’s administrative operations and providing certain other administrative services reasonably necessary for the operation of the Fund. A Fund’s administrator may also pay third parties to provide such services.

Investor C1 Shares

Investor C1 Shares are to be issued in connection with certain business combinations and generally shall not be available for purchase by the general public. Additional Investor C1 Shares shall only be issued in connection with the reinvestment of dividends and other distributions. Investor C1 Shares generally shall be subject to a contingent deferred sales charge at the rates (and subject to the reductions and exemptions) described in the applicable Fund’s prospectus.

Investor C1 Shares of a Fund shall bear the expense of distribution and shareholder servicing fees described in the prospectus, if any.

Distribution fees shall be payable to the Fund’s distributor and/or to BlackRock Advisors primarily: (i) to compensate the distributor for distribution and sales support services and to reimburse the distributor for related expenses, including payments to Selling Agents for sales support services; and (ii) to compensate BlackRock Advisors for sales support services and to reimburse BlackRock Advisors for related expenses, including payments to Selling Agents for sales support services. The Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Investor C1 Shares out of its past profits or any additional sources (other than distribution fees) which are available to it.

Shareholder servicing fees shall be payable to Service Agents for general shareholder liaison services.

Investor C1 Shares shall bear the expense of administration fees described in the prospectus, if any. Administration fees shall be payable to a Fund’s administrator for supervising the Fund’s administrative operations and providing certain other administrative services reasonably necessary for the operation of the Fund. A Fund’s administrator may also pay third parties to provide such services.

Service Shares

Service Shares shall be available for purchase by institutions which act on behalf of their customers maintaining accounts with such institutions and which provide their customers with certain shareholder services, subject to restrictions described in the applicable prospectus. Service Shares shall also be available to investors acquiring Service Shares in connection with certain business combinations (“Direct Service Investors”) and investors that participate in certain asset allocation programs described in the prospectus. Service Shares of a Fund shall not be subject to a sales charge.

Service Shares of a Fund shall bear the expense of shareholder servicing fees described in the prospectus, if any.

Shareholder servicing fees shall be payable to Service Agents for general shareholder liaison services.

The Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Service Shares out of its past profits or any sources which are available to it.

Institutional Shares

Institutional Shares shall be available from the distributor for purchase by institutional investors, individuals, registered investment advisers and others meeting certain minimum investment and other requirements described in the prospectus. Institutional Shares shall not be subject to a sales charge or a separate fee payable pursuant to any distribution plan or shareholder servicing plan. A Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Institutional Shares out of its past profits or any sources which are available to it.

Institutional Shares shall bear the expense of administration fees described in the prospectus, if any. Administration fees shall be payable to a Fund’s administrator for supervising the Fund’s administrative operations and providing certain other administrative services reasonably necessary for the operation of the Fund. A Fund’s administrator may also pay third parties to provide such services.

Class R Shares

Class R Shares shall be available for purchase only through certain retirement plans, subject to restrictions described in their prospectus. Class R Shares of a Fund shall not be subject to a sales charge.

Class R Shares of a Fund shall bear the expense of distribution, shareholder servicing and administration fees described in the prospectus, if any.

Distribution fees shall be payable to a Fund’s distributor and/or to BlackRock Advisors primarily: (i) to compensate the distributor for distribution and sales support services and to reimburse the distributor for related expenses, including payments to Selling Agents for sales support services; and (ii) to compensate BlackRock Advisors for sales support services and to reimburse BlackRock Advisors for related expenses, including payments to Selling Agents for sales support services. A Fund’s distributor, BlackRock Advisors and other parties may each make payments without limitation as to amount in connection with distribution or sales support activities relating to Class R Shares out of its past profits or any additional sources (other than distribution fees) which are available to it.

Shareholder servicing fees shall be payable to Service Agents for general shareholder liaison services.

Class K Shares

Class K shares shall be available only to (i) qualified recordkeepers with a distribution and/or fund servicing agreement (establishing an omnibus trading relationship) maintained with a Fund’s distributor, (ii) defined benefit plans, defined contribution plans, endowments and foundations with greater than $100 million in a qualified tax-exempt plan, and (iii) employers with greater than $100 million in the aggregate between qualified and non-qualified plans that they sponsor.

Class K shares are not subject to sales charges or distribution fees.

Amended and approved by the Board of Trustees of BlackRock Funds III on February 14, 2011.

Amended and approved by the Board of Trustees of BlackRock Funds III on May 17, 2011.

Amended and approved by the Board of Trustees of BlackRock Funds III on September 20, 2012