This paper addresses the basic physics underlying continental fair-weather cumuli (FWC) and issues associated with the evolution of these clouds in response to the changes in external forcings and ambient meteorological conditions. To achieve the main objectives of this study, one FWC case observed from the Atmospheric Radiation Measurement (ARM) project at the southern Great Plains (SGP) site is simulated by a series of large-eddy simulation (LES) experiments. For FWC forced by a strong buoyant convection due to large surface buoyancy fluxes, the mixed layer (ML) is usually associated with a moisture flux divergence in the vertical caused by the moisture discontinuity across the top of the convective boundary layer (CBL). Such a divergence is intimately related to cumulus initiation and development since it transports a large amount of moisture to an area above the mean ML where the forced FWC form and develop. The initiation of continental forced FWC results from thermal penetrations into the stable layer above. An important application of the penetration theory is to predict cumulus initiation. On the basis of the LES data, the authors developed a simple scheme that can be used to diagnose cumulus initiation using the variables that may be provided by large-scale models, such as the Deardorff convective velocity scale, the mean ML height, the surface layer relative humidity, and the strength of the inversion. Unlike active marine shallow cumuli, the FWC focused on in this study are forced cumuli mainly supported by the buoyancy production in the ML. However, the simulations indicate that these clouds can have a significant impact on the turbulence intensity and transport in the CBL. Through sensitivity tests, the authors also studied the influence of the surface sensible and latent heat fluxes, the stratification above the CBL, the moisture difference across the top of the CBL, and the horizontal winds on the development of FWC and cloud radiative properties.