A squall line swept eastward across the area of the Yangtze River Delta and produced gusty winds and heavy rain from the afternoon to the evening of 24 August 2002. In this papers the roles of moisture in the genesis and development of the squall line were studied. Based on the precipitable water vapor (PWV) data from a ground-based GPS network over the Yangtze River Delta in China, plus data from a Pennsylvania State University/National Atmospheric Center (PSU/NCAR) mesoscale model (MM5) simulation, initialized by three-dimensional variational (3D-VAR) assimilation of the PWV data, some interesting features are revealed. During the 12 hours prior to the squall line arriving in the Shanghai area, a significant increase in PWV indicates a favorable moist environment for a squall line to develop. The vertical profile of the moisture illustrates that it mainly increased in the middle levels of the troposphere, and not at the surface. Temporal variation in PWV is a better precursor for squall line development than other surface meteorological parameters. The characteristics of the horizontal distribution of PWV not only indicated a favorable moist environment, but also evolved a cyclonic wind field for a squall line genesis and development. The "+2 mm" contours of the three-hourly PWV variation can be used successfully to predict the location of the squall line two hours later.