Multiscale structure of field-aligned currents and plasma density records are analyzed with multiresolution wavelet technique. We show that field-aligned currents measured by Freja in the auroral region have a spectrum of scales from ~500 km down to about a hundred meters. The intensity of currents has a maximum of ~100--300 &mgr;Am-2 at the subkilometer scales. The locations of small-scale currents (corresponding presumably to discrete auroral structures) is not coincident neither with strong macroscopic density gradients, nor with the most intense large-scale currents. These structures are observed to cluster inside medium scale density cavities and represent most likely interference patterns of short (&lgr;⊥≥c/&ohgr;pe) inertial Alfv¿n waves. At kilometer scales the energetic electrons (30 eV to 30 keV) carry less than ~20% of the magnetometer current, indicating that thermal electrons are the major current carriers. We discuss also vector polarization of the magnetic perturbations at various scales which may be used as a tool for resolving polarization patterns and sense of rotation for Alfv¿n waves, vortices, and current filaments. ¿ 1998 American Geophysical Union