Pickup ions in a ring velocity distribution are unstable to several kinetic plasma instabilities. At large heliocentric distances where the overall plasma &bgr; (ratio of kinetic to magnetic energy) is dominated by the energy density of interstellar pickup ions and pickup is perpendicular to the interplanetary magnetic field, the dominant of these is the Alfv¿n ion cyclotron instability (AIC). We demonstrate by hybrid particle simulation that, for conditions where the solar wind &bgr; is low, AIC driven by the pickup ions couples to the solar wind. The result is perpendicular heating, leading to an anisotropic solar wind distribution. This process may contribute to enhanced solar wind temperatures at large heliocentric distances and may allow for indirect measurement of interstellar pickup ions. ¿ American Geophysical Union 1996