The work of two previous papers is extended and a theory of pressure broadening is developed which treats the perturbers quantum mechanically and allows for inelastic collisions, degeneracy, and overlapping lines. The impact approximation is used. It consists in assuming that it takes, on the average, many collisions to produce an appreciable disturbance in the wave function of the atom, and it results in an isolated line having a Lorentz shape. Validity criteria are given. When the approximation is valid, it is allowable to replace the exact, fluctuating interaction of the perturbers with the atom by a constant effective interaction. The effective interaction is expressed in terms of the one-perturber quantum mechanical transition amplitudes on and near the energy shell and its close relationship to the scattering matrix is stressed. The calculation of the line shape in terms of the effective interaction is the same as when the perturbers move on classical paths. Results are written explicitly for isolated lines. If the interaction of the perturbers with the final state can be neglected, the shift and width are proportional to the real and imaginary part of the forward elastic scattering amplitude, respectively. By the optical theorem, the width can also be written in terms of the total cross section. When the interaction in the final state cannot be neglected, the shift and width are still given in terms of the elastic scattering amplitudes, in a slightly more complicated fashion. Finally, rules are given for taking into account rotational degeneracy of the radiating states.