The role of lower hybrid waves at the magnetopause is reexamined. It is found that for the maximum observed wave power, the lower hybrid waves are unstable to a modulational instability on the magnetosheath side of the magnetopause. The modulational instability leads to localized field structures oriented predominantly along the magnetic field. Such patchy lower hybrid turbulence has been observed by some spacecraft. As a result of the large Ti/Te ratio, the waves saturate by ion heating; as a result, unlike other settings (e.g. comets, critical ionization phenomena), energetic electrons are not expected. The stochastic electron transport in the presence of such turbulence is analyzed and results in strongly anisotropic electron diffusion, with the dominant direction across the magnetic field. The diffusion rate exceeds significantly that expected from quasi-linear considerations and, for magnetopause parameters, also exceeds the rate discussed by Sonnerup (1980). ¿ American Geophysical Union 1994