Free Will Baptists affirm the Holy Spirit as the third person of the Trinity, fully divine and coequal with the Father and Son. The Spirit's work in salvation and sanctification is central to Free Will Baptist theology. The Spirit convicts of sin, enables faith through prevenient grace, regenerates the believer, indwells the believer as a seal and guarantee of salvation (so long as faith is maintained), and sanctifies the believer through the work of grace.

The Free Will Baptist tradition, influenced by Wesley and Methodist theology, emphasizes the Spirit's work of sanctification. The Spirit empowers believers to grow in grace, overcome sin, and live holy lives. The distinctive Free Will Baptist doctrine of entire sanctification — the work of the Spirit that purifies from inbred sin — reflects this emphasis. The Spirit also distributes gifts to believers for ministry and service in the church and world.

Free Will Baptists are generally cautious about charismatic claims of miraculous gifts, including speaking in tongues and healing, though not uniformly cessationist. The dominant position is that the Spirit's primary work is sanctification and transformation, tested against Scripture. The Spirit speaks through the Word of God and illuminates Scripture to the believer's heart, enabling understanding and obedience.