A two-dimensional cloud model is used to study the interrelationships among cloud microphysics, radiation, and dynamics in a midlatitude broken-line squall system. The impact of the ice phase, longwave and shortwave radiation on the dynamic and microphysical structures of this multicellular storm, the thermodynamic properties of the cloud ensemble, and their cloud-radiative feedback to the modeled squall line system is investigated in detail. In addition, partitioned heat, moisture, and water budgets are used to assess quantitatively the role of anvil clouds on the modeled squall line system. The major conclusions are as follows. 1) Both ice phase and radiation have little influence on the multicellular characters of the modeled squall line system. However, the ice phase and longwave radiation significantly impact the mesoscale structure and lead to a more realistic feature having an evident transition zone between the bright melting band and the convective region in the model-derived radar reflectivity. 2) The development of rear inflow in the modeled squall line system is attributed to the upshear tilt of the convective system. The intensity of rear inflow is also modulated by the ice phase and radiation. This rear inflow is found to play an important role in the cloud-radiative feedback to the modeled squall line system. 3) For this type of squall line system, the ice phase and radiation do not considerably change the heating and drying profiles of the cloud ensemble (10% ∼ 20% difference in the maximum heating and drying). Due to the dominance of convective clouds, the contributions of stratiform clouds to the total heat and moisture budgets of the cloud ensemble account for only a relatively small portion (10% and 20% ∼ 30% for the maximum heat and moisture budgets, respectively). 4) Horizontal transport of hydrometeors from deep convection is the primary source (∼2/3) of the water budget for anvil clouds in ice simulations; the rest (∼1/3) is contributed by the mesoscale lifting associated with the tilting convective system. 5) Longwave optical properties of anvils are insensitive to the ice phase. However, the ice phase can significantly impact shortwave optical properties of anvils. In contrast to the destabilization of longwave radiation, shortwave radiation acts to stabilize the stratiform and convective clouds. 6) Model simulations imply that the feedback of anvil clouds to the large-scale system is most likely dominated by radiative processes. Owing to the large coverage of convectively generated anvil clouds, the present study suggests that the missing physics of cumulus-anvil interactions in general circulation models may result in an underestimated cloud albedo and an overestimated surface insolation.