Recent observations indicate that low-altitude (below 1500 km) ion energization and thermal ion upwelling are colocated in the convective flow reversal region. In this region the convective velocity V⊥ is generally small but spatial gradients in V⊥ can be large. As a result, Joule heating is small. The observed high level of ion heating (few electron volts or more) cannot be explained by classical Joule heating alone but requires additional heating sources such as plasma waves. At these lower altitudes, sources of free energy are not obvious and hence the nature of ion energization remains ill understood. The high degree of correlation of ion heating with shear in the convective velocity (Tsunoda et al., 1989) is suggestive of an important role of velocity shear in this phenomenon. We provide more recent evidence for this correlation and show that even a small amount of velocity shear in the transverse flow is sufficient to excite a large-scale Kelvin-Helmholtz mode, which can nonlinearly steepen and give rise to highly stressed regions of strongly sheared flows. Furthermore, these stressed regions of strongly sheared flows may seed plasma waves in the range of ion cyclotron to lower hybrid frequencies, which are potential sources for ion heating. This novel two-step mechanism for ion energization is applied to typical observations of low-altitude thermal ion upwelling events. ¿ American Geophysical Union 1994