The three-dimensional nonlinear simulation of the evolution of a kinetic Alfven wave is presented for simple boundary conditions that resemble those of a discrete auroral breakup arc. The model used is a variant of the reduced magnetohydrodynamic description that includes, in addition the important dispersive effect of electron inertia. It is found that with a ''generator'' boundary condition corresponding to a current generator and a fully conducting ''load'' boundary, the wave evolves three dimensionally through a combination of shear flow and collisionless tearing mode instability. ¿ American Geophysical Union 1988