It is shown that the substorm expansion phase requires an intense localized convection in the midnight sector. The earlier magnetosphere-ionosphere coupling (MIC) model showed that the enhanced global convection imposed on the ionosphere can only produce the growth phase. By imposing the intense localized convection on the ionosphere at the end of the growth phase, the new MIC model presented in the present paper can quantitatively produce the signatures of all substorm phases. The pattern of the localized convection is consistent with the wedge-like field-aligned current obtained from the solution to the Alfv¿n wave ''field-current'' equation. During the expansion phase in the new MIC model, the ionospheric convection field increases to ~40 mV/m, the Hall conductance is enhanced to ~33 mho, the upward field-aligned current increases to ~1.8 &mgr;A/m2, and the auroral electroject current increases to ~0.8¿106 A. The results of the MIC model are in good quantitative agreement with substorm observations. We suggest that the intense localized nightside convection is driven by localized reconnection of closed field lines in the plasma sheet. A remaining great challenge in substorm research is to uncover the cause of the localized plasma sheet reconnection. ¿ American Geophysical Union 1996