The Indian Ocean Experiment (INDOEX), conducted from 1995 to 2000 to document aerosols in south Asia during winter monsoon season, revealed the existence of a layer of highly absorbing aerosols in the lower troposphere. The observed aerosol has one of the two distinctly different vertical distributions: (1) aerosols concentrated in the planetary boundary layer (PBL) below 1.5 km and (2) elevated aerosol profile peaking around 3 km. Here we provide the dynamical basis for understanding the direct effects of absorbing aerosols on the large-scale precipitation and the role of the aerosol vertical distribution. This was done through a series of the south Asian aerosol experiments with the National Center for Atmospheric Research Community Climate Model (CCM3), together with different convection parameterization closures, and the Community Atmospheric Model (CAM2). It is found that the land surface temperature underneath the aerosol layer is sensitive to the aerosol vertical distribution: The lifted layer of aerosols results in a significant cooling of the underlying land surface, while the PBL profile makes very little cooling. The mechanism of the aerosol effect on precipitation distribution is investigated by examining the correspondence between the aerosol heating profile, changes of precipitation, and the atmospheric convective instability. The direct aerosol heating of the near-surface air increases the convective available potential energy (CAPE), whereas the heating above the boundary layer decreases CAPE. Meanwhile, the regionally concentrated low-level aerosol heating tends to cause large-scale rising motion over time, which increases CAPE by decreasing the midlevel temperature. The net CAPE change is small for the lifted profile (i.e., profile elevated above PBL) because the CAPE increase by the midlevel cooling is counteracted by the CAPE decrease through the direct haze heating above the PBL. The precipitation increase averaged over the aerosol area is much larger when the PBL profile is used than when the lifted profile is used in the CCM3 with a CAPE-based convective parameterization closure. The sensitivity of the aerosol effect to convective parameterization closure is tested using a new closure, which is based on the environmental contribution to CAPE (CAPEe). It is shown that when this closure is used in CCM3, the precipitation increase averaged over the aerosol area is small regardless of the vertical profile. This is because the direct heating of either profile decreases CAPEe, opposing the CAPEe increase by the midlevel cooling.