A three-dimensional, time-dependent model with a two-grid system was developed to study the expansion of a plasma cloud in the F region and topside ionosphere. The model maintains an adequate resolution for the released cloud motion and its interaction with the immediate environment, and it includes the effect due to the coupling with the distant part of the ionosphere (i.e., E region). Simulations were performed using realistic background ionospheric density profiles in both the E and F regions. The results show that the cloud coupling to the underlying E region affects the perpendicular cloud motion the most. The distant coupling acts to reduce the perturbation potential and perpendicular velocity and delays or eliminates the striations. These simulation results are consistent with simple analytical approximations. The simulation results also show that the distant coupling has a very small effect on ''localized'' phenomena, such as the cloud expansion along the B↘ field and the electrostatic snowplow. The cloud-induced electric potential is attenuated in the lower E region. The electrons flow along the B↘ field, carrying the current to the E region and back to the cloud. The current closure is demonstrated in carrying the current to the E region and back to the cloud. The current closure is demonstrated in three dimensions for the first time for such a problem. The perpendicular current flowing through the plasma cloud is closed by the field-aligned electron current and the background perpendicular (mainly Pedersen) current in both the E and F regions. The ''image cloud'' formation in the E region is also clearly demonstrated. The variation of the density change in the ''image cloud'' along the B↘ field and the features of the image cloud are shown. ¿ Americn Geophysical Union 1994