Heatwaves in the subtropical and mid-latitude regions, which arise from localized heating can ripple through the atmosphere and persist for weeks, yet the mechanisms behind this chain of events remain difficult to disentangle. Here we use the Aeolus 2.0 model, which is a moist-convective thermal rotating shallow-water (mcTRSW) framework of intermediate complexity, to explore how buoyancy anomalies evolve under both dry and moist conditions, innovatively including background effects to enhance realism. We find that localized heating sets off a rapid atmospheric adjustment: air converges near the surface, diverges aloft, and quickly organizes into paired cyclonic (lower layer) and anticyclonic circulations (upper layer). Earth’s rotation then distorts these structures, producing asymmetries, spiral rainbands, and rainband-driven feedbacks. Moist convection greatly amplifies this response by releasing latent heat, which fuels sustained instability and rainfall organization. Inertia–gravity waves emerge as a key pathway for redistributing heat and momentum, while Rossby waves and beta gyres gradually reshape anomalies, tilting them poleward and breaking them into smaller vortices. The simulations also reproduce well-known observational signatures, including comma-shaped water vapor patterns and mesoscale vortices. Together, these results show how a simple localized heat source can trigger a cascade of atmospheric responses that link convection, wave dynamics, and large-scale circulation. By capturing these processes, Aeolus 2.0 provides a bridge between theoretical frameworks and full climate models, offering new insight into the dynamics that sustain extreme heatwaves in a warming world.