It is of great scientific and technical interests to conduct fundamental studies on the laser interactions with nanoparticles-reinforced metals. This part of the study presents the effects of nanoparticles on surface tension and viscosity, thus the heat transfer and fluid flow, and eventually the laser melting process. In order to determine the surface tension and viscosity of nanoparticles-reinforced metals, an innovative measurement system was developed based on the characteristics of oscillating metal melt drops after laser melting. The surface tensions of Ni/Al2O3 (4.4 vol. %) and Ni/SiC (3.6 vol. %) at ∼1500 °C were 1.39 ± 0.03 N/m and 1.57 ± 0.06 N/m, respectively, slightly lower than that of pure Ni, 1.68 ± 0.04 N/m. The viscosities of these Ni/Al2O3 and Ni/SiC MMNCs at ∼1500 °C were 13.3 ± 0.8 mPa·s and 17.3 ± 3.1 mPa·s, respectively, significantly higher than that of pure Ni, 4.8 ± 0.3 mPa·s. To understand the influences of the nanoparticles-modified thermophysical properties on laser melting, an analytical model was used to theoretically predict the melt pool flows using the newly measured material properties from both Part I and Part II. The theoretical analysis indicated that the thermocapillary flows were tremendously suppressed due to the significantly increased viscosity after the addition of nanoparticles. To test the hypothesis that laser polishing could significantly benefit from this new phenomenon, systematic laser polishing experiments at various laser pulse energies were conducted on Ni/Al2O3 (4.4 vol. %) and pure Ni for comparison. The surface roughness of the Ni/Al2O3 was reduced from 323 nm to 72 nm with optimized laser polishing parameters while that of pure Ni only from 254 nm to 107 nm. The normalized surface roughness reduced by nearly a factor of two with the help of nanoparticles, validating the feasibility to tune thermophysical properties and thus control laser-processing outcomes by nanoparticles. It is expected that the nanoparticle approach can be applied to many laser manufacturing technologies to improve the process capability and broaden the application space.