We study the problem of onset of reconnection and the corresponding nonlinear evolution of reconnection in the near-Earth plasma sheet, where the influence of the Earth's dipole field is essential. This is done by the help of two-dimensional resistive MHD simulations. The simulations start from a two-dimensional equilibrium model for the near-Earth plasma sheet, including the Earth's dipole field explicitly. The stability properties of this start configuration differ significantly from the stability of two-dimensional tail equilibria, including both plasma sheet and lobe. This allows us to study onset and evolution of resistive modes that are linearly stable but non-linearly unstable. We find qualitatively significant differences, as compared with simulations of tail configurations. For instance, we find sunward flow both tailward and earthward of the reconnection X line. The corresponding reconnection rates come out to be about an order of magnitude lower compared with reconnection as a result of a large-scale tearing mode in tail configurations. We show that the reconnection rates can be significantly increased by suitable modifications of the start configuration. ¿ American Geophysical Union 1995.