The Weather Research and Forecast (WRF) model with a high resolution is used to simulate the rainfall during a squall line process that occurred in eastern China on 2 May 2016. Based on the successful simulation of the squall line process including its formation, strengthening, and evolution, the convective instability characteristics and the causes of the convective stability variation are analyzed. The results are as follows. (1) Before the rainfall occurrence, the atmosphere was convectively unstable; after the rainfall occurred, however, the atmosphere tended to be stable due to the release of unstable convective energy. In order to explore the physical cause of the convective stability, the tendency equation of vertical potential temperature gradient in a local rectangular coordinate system is deduced and the potential divergence is the major forcing term in the equation. In the weak rainfall area, the potential divergence in the lower atmosphere was negative, which was conductive to enhanced potential instability. In the strong precipitation area, the potential divergence was positive and tended to inhibit the potential instability. In the lower levels of rainfall area, the main component of the potential divergence was the vertical wind shear item, which represented the joint effects of the vertical wind shear and the atmospheric moist baroclinicity. While in the higher levels, the main component was the divergence item, which reflected the coupling effects of horizontal divergence and potential stability. (2) Since the potential divergence can well represent the effects of vertical wind shear, atmospheric baroclinicity, horizontal divergence, and the variation of atmospheric potential stability, it is used to forecast precipitation during the squall line process in the present study. Results show that the spatial and temporal distribution of potential divergence is in good agreement with that of observed hourly precipitation. Therefore, the potential divergence is indicative of rainfall area and can provide an important reference for operational precipitation forecast during squall line processes.