We have used data from Dynamics Explorer 2 to investigate the rate of conversion of electromagnetic energy into both thermal and bulk flow particle kinetic energy in the high-latitude ionosphere. The flux tube integrated conversion rate E⋅J can be determined from spacecraft measurements of the electric and magnetic field vectors by deriving the field-aligned Poynting flux, S∥=S⋅Bˆ0, where Bˆ0 is in the direction of the geomagnetic field. Determination of the Poynting flux from satellite observations is critically dependent upon the establishment of accurate values of the fields and is especially sensitive to errors in the baseline (unperturbed) geomagnetic field. We discuss our treatment of the data in some detail, particularly in regard to systematically correcting the measured magnetic field to account for attitude changes and model deficiencies. S∥ can be used to identify the relative strengths of the magnetosphere and thermospheric winds as energy drivers and we present observations demonstrating the dominance of each of these. Dominance of the magnetospheric driver is indicated by S∥ directed into the ionosphere. Electromagnetic energy is delivered to and dissipated within the region. Dominance of the neutral wind requires that the conductivity weighted neutral wind speed in the direction of the ion drift be larger than the ion drift, resulting in observations of an upward directed Poynting flux. Electromagnetic energy is generated within the ionospheric region in this case. We also present observations of a case where the neutral atmosphere motion may be reaching a state of sustained bulk flow velocity as evidenced by very small Poynting flux in the presence of large electric fields. ¿ American Geophysical Union 1994