The Saharan Air Layer (SAL) has been shown to be an elevated, well-mixed, warm, dry, frequently dusty layer. The structure of the SAL plays an important role in regional climate and in long-range dust transport. A new analysis of aircraft observations shows that although increased dustiness in the SAL is associated with drier conditions in the lower-SAL as expected, dustiness is also associated with increased moisture in the upper-SAL. We assess the radiative effects of the observed dust and increased water vapor (WV) using a radiative transfer model. The observed WV in the upper-SAL affects the top-of-atmosphere (TOA) direct radiative effect (DRE), while lower-SAL WV affects the surface DRE and column atmospheric heating. TOA DRE is negative for dust-only, while including both the observed dust and WV reduces the magnitude of the negative TOA DRE by 11%. The observed WV structure increases the negative surface DRE from dust by 8% and increases atmospheric heating by 17%. These effects are driven by longwave (LW) radiation, whereby WV changes increase the positive TOA LW DRE by 30%, decrease the surface LW DRE by 52% and change the sign of LW atmospheric heating from negative to positive. The observed WV profile leads to enhanced cooling in the moist upper-SAL and heating in the dry lower-SAL under dustier conditions. Increased WV in the SAL is consistent with other studies demonstrating a trend of increased WV over the Sahara. This work demonstrates the importance of the upper-SAL WV profile in determining the radiative effect dust.