The theory of electrostatic, collisional plasma modes that are driven unstable by a sheared field-aligned ion flow velocity (i.e., $underline {rm V}$io = Vo(x)¿z, $underline {rm B}$o = Bo¿z) is presented. The threshold condition for the instability is Vo'/νin>2(1+Ti/Te) and the unstable modes are characterized by k∥≪k⊥ such that λ∥(=2π/k∥)≫λm and 2πρi<λ⊥(=2π/k⊥)⪨Lv, where Vo'=dVo/dx, νin is the ion-neutral collision frequency, λm is the electron mean-free-path, ρi is the ion gyroradius and Lv is the velocity shear scale length. It is shown that the linear instability provides a direct means of exciting the observed sub-km scale irregularities in the auroral F-region. The spectral characteristics of the density and the electric field fluctuations that can be inferred from the theory are found to be consistent with the observations.