As an extension of the model for generation of a pair of region 1 and region 2 field-aligned currents (FACs), which has been proposed by Yamamoto and Ozaki [1993>, we study the formation of auroral omega bands in the region 1--region 2 FAC system. In their model the hot plasma torus (HPT) is defined as the hot (≳1 keV) plasma population contained in the magnetic shell which is connected to two ovals of diffuse auroras on the northern and southern polar ionospheres. Their numerical simulation has shown that the paired region 1--region 2 FACs can be generated as a result of the distortion of the HPT in the magnetosphere, which occurs under the influence of the solar wind convection. That HPT system is potentially unstable: Under certain conditions the electrostatic interchange instability due to the particle magnetic drifts can be fully developed on the poleward side of the HPT. The two-dimensional particle simulation in the present paper demonstrates that an azimuthal chain of electric dipoles is formed by the interchange instability developing in the paired region 1--region 2 FAC system. This means a drastic modification of the original region 1 and region 2 FACs such that a sequence of east-west oriented pairs of downward and upward field-aligned currents emerges in the region 1 zone. The pattern of upward FACs thus formed, with tongues extending poleward, can be identified with the omega bands or torch structures. The magnetospheric (or ionospheric) potential distribution obtained in the simulation is consistent with the observed distributions of ionospheric electric field and field-aligned currents in events of torches/omega bands.¿ 1997 American Geophysical Union