To study the nonlinear plasma dynamics associated with electrodynamic tether system, we performed computer experiments using a 2D electromagnetic particle code. In the computer experiments, two conducting bodies, corresponding to the satellite and the orbiter, are placed in the x-y plane in a vehicle frame. The electrons collected by the tether system are emitted from the orbiter. We focus on the plasma response to the tether system, the electron beam dynamics, and the wave emission. At the satellite region, plasma depletion owing to the electron collection along B0 by the high potential satellite is found as well as a wake structure in the downstream region of the plasma flow. At the orbiter region, an electron beam cloud is clearly created in the downstream region. The local electric field induced by the cloud modifies the beam pitch angle and accelerates some of the beam electrons along B0. Moreover, due to the cross-field current by the electron E¿B drift motion around the cloud, LHR mode waves are enhanced locally. The local LHR wave excitation is quantitatively interpreted by the theory of the lower-hybrid-drift instability. ¿ American Geophysical Union 1991