Abstract. Satellite measurements show that ion beams above the auroral acceleration region are heated to hundreds of eV in a direction perpendicular to the magnetic ®eld. We show that ion acoustic waves may be responsible for much of this heating. Even in the absence of a positive slope in the velocity distribution of the beam ions, ion acoustic waves can be generated by a fan instability. We present analytical estimates of the wave growth rate and ion beam heating rate. These estimates, which are con®rmed by particle simulations, indicate that the perpendicular temperature of the beam ions will increase by 30 eV/s, or by 1 eV in 20±25 km. From the simulations we also conclude that the heating saturates at a perpendicular temperature around 200 eV, which is consistent with observations. Key words. Ionosphere (wave-particle interactions) á Magnetospheric Physics (plasma waves and instabilities) á Space plasma physics (wave-particle interactions).