Design III is an experimental design originally proposed by R.E. COMSTOCK and H.F. ROBINSON for estimating genetic variances and the average degree of dominance for quantitative trait loci (QTL) and has recently been extended for mapping QTL. In this paper, we first extend COMSTOCK and ROBINSON's analysis of variance to include linkage, two-locus epistasis and the use of F3 parents. Then we develop the theory and statistical analysis of orthogonal contrasts and contrast x environment interaction for a single marker locus to characterize the effects of QTL. The methods are applied to the maize data of C.W. STUBER. The analyses strongly suggest that there are multiple linked QTL in many chromosomes for several traits examined. QTL effects are largely environment-independent for grain yield, ear height, plant height and ear leaf area and largely environment dependent for days to tassel, grain moisture and ear number. There is significant QTL epistasis. The results are generally in favor of the hypothesis of dominance of favorable genes to explain the observed heterosis in grain yield and other traits, although epistasis could also play an important role and overdominance at individual QTL level can not be ruled out.