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Oppenheimer Principal Protected Trust III - Correspondence

                            OppenheimerFunds, Inc.
                           2 World Financial Center
                        225 Liberty Street, 11th Floor
                        New York, New York 10281-1008

August 2, 2004

VIA EDGAR
---------
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, NW
Washington, DC  20549
Attn: Mr. Vincent J. DiStefano

      Re:   Oppenheimer Principal Protected Trust III
            Registration Statement on Form N-1A
            File Numbers 333-114495; 811-21561
            ----------------------------------

Dear Mr. DiStefano:

      The purpose of this letter is to respond to your  comment  letter  dated
May 27, 2004 with respect to Oppenheimer  Principal Protected Main Street Fund
III (the "Fund"), a series of Oppenheimer  Principal  Protected Trust III (the
"Trust").  Responses to your comments are as follows:

Registration Statement on Form N-1A
-----------------------------------

The  filing  is  incomplete  and  additional  information  must be  filed in a
pre-effective  amendment.  The staff may comment on any additional information
filed by pre-effective amendment.

Whenever a comment is made in one  location,  it is  considered  applicable to
all similar disclosure appearing elsewhere in the registration statement.

      The Fund  will file a  pre-effective  amendment  as soon as  practicable
with all  information  needed for the filing to be complete.  The Fund and its
Distributor,  OppenheimerFunds Distributor, Inc., will request acceleration of
the effectiveness of the pre-effective amendment after it is filed.

Prospectus
----------

Overview
--------

Please advise us  supplementally  whether the Warranty Provider files periodic
reports with the Commission  pursuant to the Securities  Exchange Act of 1934.
If the  Warranty  Provider  does not file  such  reports,  please  provide  an
undertaking  to  attach  the  Warranty  Provider's  financial  statements  and
independent auditor's consent to the registration statement.

      The  Warranty  Provider  is not  required  to file  and  does  not  file
periodic reports with the Commission  pursuant to the Securities  Exchange Act
of  1934.  Part  C  of  the  Fund's  registration   statement  contains,   and
amendments to the  registration  statement will contain,  the following  under
Item 30 - Undertakings:

            The Registrant hereby undertakes to update its registration
      statement on an annual basis under the Investment Company Act of
      1940, as amended (the "1940 Act") to include updated audited
      financial statements for Merrill Lynch Bank USA (or any
      successors or substituted entities thereto), as applicable.
      Merrill Lynch Bank USA has represented to Registrant that its
      audited financial statements to be included in Registrant's
      Registration Statement, as it may be amended from time to time,
      have been and will be prepared in accordance with Regulation S-X
      and U.S. GAAP, as if Merrill Lynch Bank USA was required to file
      Form 10-K under the Securities Exchange Act of 1934, as amended
      (the "Exchange Act").  Further, the Registrant undertakes under
      such circumstances to include as an exhibit to its registration
      statement as it relates to the Fund, the consent of the
      independent auditors of Merrill Lynch Bank USA (or such
      successors or substituted entities), as applicable, regarding
      such financial statements.

Please  disclose  that the  Warranty  Provider is not a bank  regulated by the
Federal  Reserve or  Treasury.  Please  provide a summary  description  of the
Warranty  Provider's  size or  ability to fulfill  its  obligations  under the
Warranty.

      The portion of the prospectus that describes the Warranty  Provider will
be amended to include the following:  "The Warranty  Provider is regulated and
examined by the FDIC and the Utah  Department  of Financial  Institutions.  It
is not  regulated by the Federal  Reserve or the U.S.  Department of Treasury.
As of March 26, 2004, MLBUSA's assets totaled approximately $67 billion."

The prospectus  indicates that the Fund may continue into the Warranty  Period
with less than $75 million in net assets.  Will  operating  the Fund with less
than $75 million  materially  impact the Fund's  proposed  plan of  operation,
investment  objectives,  policies,  and  strategies  or otherwise  present any
material  risks?  Will the expense  ratio be  impacted?  Will the Warranty fee
be reduced if Fund assets are less than $75 million?  Please  advise the staff
or revise the prospectus accordingly.

      The Fund's investment  adviser,  OppenheimerFunds,  Inc. (the "Manager")
has  determined  that the Fund can be operated  efficiently  with at least $70
million in assets  without  materially  impacting the Fund's  proposed plan of
operation,   investment  objectives,  policies  and  strategies  or  otherwise
present any material  risks.  Should the Trustees  decide to continue the Fund
with less than $75 million,  the Trustees will first determine that there will
be no material  impact on the Fund's  proposed plan of  operation,  investment
objectives,  policies and strategies or otherwise  present any material risks.
The minimum  amount of $70 million  was chosen as an  appropriate  point where
the Fund  could be  operated  efficiently  without  a  material  impact on the
Fund's  expense  ratio.  The  Warranty  Fee would not be  reduced  if the Fund
continues with less than $75 million in assets.

Clarify  whether or not  shareholders  will also  receive  interest on amounts
returned by the Fund as a result of  liquidation  during the Offering  Period.
In this regard,  disclose what will be repaid to  shareholders  if the Fund is
liquidated after the Offering Period.

      The prospectus states under the section entitled  "Offering Period" that
if the Fund's Trustees decide to return  shareholders'  investments at the end
of the Offering  Period,  shares of the Fund will be  exchanged  for shares of
Oppenheimer Money Market Fund, Inc. and the Fund's  Distributor will rebate or
waive  any  sales  charges  paid by  shareholders  in  connection  with  their
purchase of Fund shares  (other than as a result of an exchange  into the Fund
from another  Oppenheimer fund). Thus,  shareholders would receive the benefit
of any  income  accrued  and  paid by the Fund  during  the  Offering  Period.
During the Offering Period,  the Manager will voluntarily waive its management
fee and will assume any Fund  expenses to the extent  necessary to assure that
if  the  Fund  is  liquidated   before  the  start  of  the  Warranty  Period,
shareholders  will receive at least their  initial  investment.  The Fund will
not pay any 12b-1 fees to the Distributor  should the Fund be liquidated prior
to the Warranty  Period and therefore any service fees paid by the Distributor
to  broker-dealers  at the time of sale will not be reimbursed by the Fund. If
the Trustees  determine it is in the shareholders'  best interest to liquidate
the Fund after the Offering Period but before the Maturity Date,  shareholders
will  receive the  then-current  net asset  value.  This is  disclosed  in the
prospectus under "The Warranty Agreement and The Financial Warranty."

Please ensure that the appropriate  representatives of Oppenheimer Main Street
Fund ("Underlying  Fund") also sign the Fund's registration  statement.  Also,
please include the Underlying Fund's financial  statements in the registration
statement.

      We will ensure that the appropriate  representatives of Oppenheimer Main
Street Fund (the  "Underlying  Fund") sign the Fund's  registration  statement
and that it includes the Underlying Fund's financial statements.

Will the Fund invest in equity  securities  outside the  Underlying  Fund?  If
so, please summarize the Fund's equity investment strategies and risks.

      During the  Warranty  Period,  the equity  securities  in which the Fund
will invest  include shares of the  Underlying  Fund and futures  contracts on
the Standard and Poor's 500 Composite Stock Price Index ("S&P  futures").  The
sections in the Fund's prospectus  entitled "The Fund's  Investment  Objective
and  Principal  Investment  Strategies"  and "About  the  Fund's  Investments"
contain descriptions of the Fund's equity investments, objectives and risks.

The disclosure  indicates the Fund will charge a sales load and will invest in
shares of the  Underlying  Fund,  which also charges a sales load,  as well as
equities  other  than  the  Underlying   Fund,  and  debt.   Please   disclose
supplementally  the  exception(s)  to Section  12(d)(1)(a)  of the  Investment
Company Act of 1940 (the  "Act") upon which the Fund  expects to rely in order
to invest in the Underlying  Fund,  equities  outside the Underlying Fund, and
debt, respectively, as well as the basis for such reliance.

      The  sections  of  the  prospectus   entitled  "The  Fund's   Investment
Objective and Principal  Strategies" and "About the Fund's  Investments" state
that during the  Warranty  Period,  the Fund's  equity  holdings  will consist
solely  of Class Y shares  of the  Underlying  Fund and S&P  futures.  Class Y
shares of the  Underlying  Fund have no sales load or 12b-1  fee.  It does not
state  that  the  Fund  will  invest  in  equity  securities  other  than  the
Underlying  Fund or S&P  futures,  and the  Fund  will not do so.  The  Fund's
prospectus   does  disclose  that  the  Underlying   Fund  invests  in  equity
securities,  and the prospectus describes the investment  strategies and risks
of the Underlying  Fund's  investments.  The Fund will invest in shares of the
Underlying Fund in reliance on Section  12(d)(1)(G) of the Investment  Company
Act. The Fund may invest in S&P futures,  and the debt  securities held by the
Fund  may  consist  of  securities   other  than  government   securities  and
short-term paper as required by sub-paragraph  II of Section  12(d)(1)(G),  in
reliance  on an  exemptive  order  of  the  Commission  dated  July  21,  1998
(Investment  Company Act Rel. No. 23324; SEC File No. 812-10936) issued to the
mutual funds advised by OppenheimerFunds, Inc.

If the  Underlying  Fund may invest a significant  percentage of its assets in
foreign  securities  or  derivatives,  disclose  the  attendant  risks  in the
discussion of "Main Risks of Investing in the Fund."

      The section of the prospectus  entitled "About the Fund's  Investments -
The Fund's Principal Investment Policies and Risks" states the following:

      Risks of Foreign Investing. The Underlying Fund can buy securities of
      companies or governments in any country, developed or underdeveloped.
      While there is no limit on the amount of the Underlying Fund's assets
      that may be invested in foreign securities, the Manager does not
      currently plan to invest significant amounts of the Underlying Fund's
      assets in foreign securities. While foreign securities offer special
      investment opportunities, there are also special risks, such as the
      effects of a change in value of a foreign currency against the U.S.
      dollar, which will result in a change in the U.S. dollar value of
      securities denominated in that foreign currency.

Specify the Underlying  Fund's investment  objective and principal  strategies
and  risks.  Include  a  discussion  of  market  capitalization  strategy  and
attendant  risks,  such as small-cap  risk.  Does the  Underlying  Fund have a
high portfolio  turnover rate? If so, please so indicate in this section;  and
disclose the risks of high portfolio turnover.

      The  sections  of  the  prospectus   entitled  "The  Fund's   Investment
Objective  and  Principal  Strategies"  and  "About  the  Fund's  Investments"
describe the Underlying Fund's investment objective,  principal strategies and
risks.  The section  entitled "Risks of Investing in Stocks" of the prospectus
describes  the  Underlying  Fund's  policy with respect to investing in small-
and  medium-size  companies and the attendant  risks.  The  Underlying  Fund's
portfolio  turnover ratio has not exceeded 100% in any of its last five fiscal
years.

Provide a  cross-reference  to the  location  in the  prospectus  wherein  the
material  terms of the Financial  Warranty  Agreement  (the  "Agreement")  are
discussed.

      The  section  entitled  "Main  Risks  of  Investing  in the Fund - Risks
Associated  with The Financial  Warranty"  contains a  cross-reference  to the
location in the  prospectus  containing a description of the material terms of
the Financial Warranty Agreement.

Please  summarize in the  discussion  of "Main Risks of Investing in the Fund"
the  most  likely  events  that  would  lead to  termination  of the  Warranty
Agreement.

      The section of the prospectus  entitled "The Warranty  Agreement and the
Financial  Warranty"  contains a detailed  discussion of the  circumstances in
which the Warranty  Provider could terminate the Warranty  Agreement.  It sets
forth  in  bullet   points   the  eleven   occurrences   that  could  lead  to
termination.  The Manager  cannot  predict  which of the eleven  circumstances
would be more likely to occur than  others.  The "Main Risks of  Investing  in
the Fund" section of the prospectus states that the Warranty  Agreement may be
terminated in certain  circumstances  and  specifically  cross-references  the
location that details the termination provisions.

The  disclosure  indicates  that  Fund  shareholders  would  have no  recourse
against the Warranty  Provider in the event it defaults on its  obligations to
the Fund. Please advise us supplementally  whether  shareholders would be able
to  commence  a  derivative  action in the  event  the Board  does not sue the
Warranty Provider, and if not, why not.

      Massachusetts  state law  would  likely  govern  any  determinations  of
whether  shareholders  would be able to  commence a  derivative  action if the
Warranty  Provider  defaults  on its  obligations  to the  Fund.  The  Manager
cannot  project an opinion as to whether a  Massachusetts  court would allow a
derivative action in any given situation.

Fees and Expenses of the Fund
-----------------------------

Supplementally  advise the staff  whether any amounts  payable by the Warranty
Provider  under the Agreement  could be used by  Oppenheimer  to  subsequently
recover reimbursed expenses and/or fees waived.

      The amounts  payable by the Warranty  Provider under the Agreement could
not be used by  OppenheimerFunds,  Inc.  to  subsequently  recover  reimbursed
expenses  and/or fees waived.  Assuming the Bank is required to make a payment
under the Warranty Agreement,  the Bank will make such payment directly to the
Fund in the amount of any shortfall between the Fund's  then-current net asset
value and the  Warranty  Amount.  The only way the Manager  will  benefit from
that  payment is if it still owns its seed money  shares when that  payment is
made.

Please disclose all fees of the Underlying Fund in narrative form.

      The  following  statement  will be added to "Fees  and  Expenses  of the
Fund"  section of the  prospectus:  "During its latest  fiscal  year,  Class Y
shares of the  Underlying  Fund were  charged  a  management  fee of 0.46% and
other expenses equal to 0.41%,  amounting to total annual  operating  expenses
of 0.87%."

Please  ensure that the fee  presentation  contained  in footnote 7 to the fee
table is less prominent that the fee table itself.

      The fee  presentation  in the footnote will be less  prominent  than the
fee table itself in the prospectus.

Please  advise us  supplementally  why the other  expenses for classes C and N
are  higher  than  those  for  classes  A a