Two-dimensional numerical simulations of type II irregularities, attributed to gradient-drift instabilities, are carried out with observed profiles in the daytime equatorial electrojet. Earlier work has shown that these profiles are linearly unstable to gradient-drift modes with peak growth rates at wavelengths of the order of 1 km. The nonlinear evolution of these instabilities leads to saturated turbulent structures, with the linear drive at kilometer-scale wavelengths quenched by a direct energy cascade to short wavelengths that are effectively damped by velocity shear and diffusion. The saturated turbulent structures show quasi-steady 1--2 km horizontal waves, and appear to be quite isotropic in the plane perpendicular to the ambient magnetic field. The electron vertical velocity spectra, constructed from the simulation output, show 1--2 km vertical structures which are qualitatively in accord with recent high-resolution radar observations at the Jicamarca Observatory in Peru. ¿ 1998 American Geophysical Union