Observations are presented which show that plasma parameters vary on a scale length smaller than the ion gyroradius at the interface between the plasma sheet boundary layer and the lobe. The Vlasov equation is used to investigate the properties of such a boundary layer. The existence, at the interface, of a density gradient whose scale length is smaller than the ion gyroradius implies that an electrostatic potential (e ϕ~2&kgr;Te, where e and Te are the charge and electron temperature, respectively) is established in order to maintain quasineutrality. Strongly sheared (scale lengths smaller than the ion gyroradius) perpendicular and parallel (to the ambient magnetic field) electron flows develop whose peak velocities are on the order of the electron thermal speed and which carry a net current. The free energy of the sheared flows can give rise to a broadband spectrum of electrostatic instabilities starting near the electron plasma frequency and extending below the lower hybrid frequency. ¿ American Geophysical Union 1990