SUMMARY: We describe improvements to BAli-Phy, a Markov chain Monte Carlo (MCMC) program that jointly estimates phylogeny, alignment and other parameters from unaligned sequence data. Version 3 is substantially faster for large trees, and implements covarion models, additional codon models and other new models. It implements ancestral state reconstruction, allows prior selection for all model parameters, and can also analyze multiple genes simultaneously. AVAILABILITY AND IMPLEMENTATION: Software is available for download at http://www.bali-phy.org. C++ source code is freely available on Github under the GPL2 License. SUPPLEMENTARY INFORMATION: Supplementary data are available at Bioinformatics online.