We present results from detailed spectral analyses of 43 RXTE observations of GRO J1655‐40 made throughout 1996. Spectra taken over 27 days separated by about one week each allow us to determine 3–200 keV continuum and line variability during the thermally dominated and steep power‐law states seen. Inferred effective radii for maximum disk emission are consistently below 6 gravitational radii, confirming the Kerr nature of the black hole. The broad iron line is modeled by a broad emission line and an absorption edge at ∼6.7 keV. We discuss the variation in line and continuum parameters, and suggest the inner portion of the accretion disk is warped and hot. © 2004 American Institute of Physics