A one-dimensional diagnostic coupled air-sea model (described in the companion paper) is applied to the analysis of the heat and moisture budgets over the Arabian Sea during the 1979 monsoon onset period. The surface energy budget, which is dominated by a balance between net shortwave radiation and latent heat during the preonset period, is significantly altered just prior to the onset itself. At that time, cloud cover sharply increases and the net shortwave flux correspondingly decreases. Subsequently, increasing surface winds produce a large increase in the latent heat flux a few days after the onset. In the free atmosphere, the heat budget displays a similarly dramatic change. At 500 mb, radiative fluxes and horizontal and vertical advection dominate the heat budget before the onset. After the onset, however, the budget is primarily a balance between deep convective heating and vertical advective cooling. The 500-mb moisture budget displays a correspondingly strong effect. Before the onset, horizontal advection of moisture is the dominant term, while after the onset, the distribution by convection of the surface moisture flux, together with moisture removal by large-scale condensation, becomes important. Sensitivity studies with the model illuminate the role of interacting physical processes. Model results show that the moistening due to horizontal advection tends to alter the radiative fluxes so as to hinder the formation and maintenance of the inversion that characterizes preonset conditions, thus favoring the formation of deep convection. This result is consistent with a suggestion by Doherty and Newell. Additionally, the interaction between the atmosphere and the upper ocean is explored in a series of sensitivity experiments. The decrease in ocean mixed-layer temperature, which follows the monsoon onset, acts to reduce the latent heat flux significantly. This effect may influence the duration and intensity of the monsoon, as well as the total precipitation, and underscores the potential importance of an accurate specification of sea surface temperature for monsoon prediction.