Most of the familiar objects in modern society, from buildings and bridges, to vehicles, computers, and medical devices, could not be produced without the use of welding. Especially, with the rising development of advanced manufacturing industry, such as aircraft and aerospace industries, shipbuilding and marine industries and automotive industries, cost-effective high-efficiency high-quality welding processes are being progressively required for increasing performance requirements and enhancements in product quality. Thus, the plasma arc welding (PAW) provides a means for these process demands by using a high power density heat source. The keyhole effect is commonly recognized as the primary attribute to the deep-penetration welding. Compared to electron beam welding and laser welding, PAW is more cost effective and more tolerant of joint gaps and misalignment. However, the mechanism of keyhole formation in PAW process differs from that in other high power density welding processes. In PAW the keyhole is produced and maintained mainly by the pressure of the plasma arc, rather than by the recoil pressure of the evaporating metal in electron beam and laser welding. Considerable research has been focused on keyhole tracking and effective heat source models for PAW process. However, the existing models rarely can present the transient influences of the keyhole evolution on heat transfer and fluid flow in the weld pool. In this work, a three dimensional PAW model was established with the interaction between heat source and keyhole evolution considered. A combined heat source model was proposed to account for the transient energy propagation.It consists of a Gaussian heat flux model on the top surface and below a dynamic developing conical heat source, which continues rising in the wake of the keyhole growth. Volume of Fluid (VOF) method was applied to track the dynamic keyhole shapes, and the transient height of heat source model was simultaneously updated with the increasing keyhole depth. The transient evolution of heat density distribution concerning the keyholing effect was analyzed in details, and the corresponding temperature field was calculated and displayed to reveal the mechanism of heat transfer in the weld pool. The keyhole process and molten metal flow in the weld pool was also investigated. Finally, experiment was carried out on a stainless steel plate with thickness 6 mm, and the calculated results showed good agreement with the experimental data. It validated the mathematical model and the applicability of the dynamic heat source, which provides an insight into the understanding of the thermal process in the keyhole of PAW.