A fully three-dimensional, magnetohydrodynamic simulation of velocity-sheared plasma flow in an ambient transverse magnetic field with bent magnetic field lines has been performed. ''Ionospheric-like'' boundary conditions were used for closing field-aligned currents, the two ionospheres being represented by conducting plates with constant resistivity. Compared to the standard plane 2D case with a uniform transverse magnetic field, the growth rate of the Kelvin-Helmholtz instability drops significantly as bending increases. Under conditions representative of the Earth's low latitude boundary layer, the instability may be suppressed completely by the magnetic field-line tension if the fieldline bending is sufficiently strong. For weak bending, a combination of the tearing mode instability and the Kelvin-Helmholtz instability leads to the formation of localized 3D current/vortex tubes, the ionospheric foot prints of which are possible models of the auroral bright spots observed by the Viking satellite. ¿ American Geophysical Union 1994