In this paper, we investigate the response of the nighttime, midlatitude ionosphere to atmospheric gravity waves in the presence of the global dynamo electric field. Previous theories of gravity wave-ionosphere interaction have neglected the zero-order electric field generated by the global dynamo. We find, however, that gravity wave winds carrying the ionosphere upward and downward along the tilted midlatitude magnetic field can cause spatial variations in the total conductive load experienced by the global circuit. In turn, these variations in ionospheric conductivity create divergences in the global current which produce local electric fields. Since ionospheric conductivity depends on altitude, any nighttime gravity wave which perturbs the height of the ionosphere may, through this mechanism, produce such fields. If true, the consequences of this interaction are potentially quite important. Gravity wave-induced electric fields may be the source of much of the day-to-day variation of the total ionospheric electric field; they may substantially alter the ionospheric electron density response to gravity waves; and they may seed ionospheric plasma instabilities. Further experimental investigations are necessary to test these predictions.¿ 1997 American Geophysical Union