Recent space missions such as FAST and Freja report highly structured plasma flows along the magnetic field. Electrostatic fluctuations that can be supported by such inhomogeneous parallel flows are investigated. It is found that even a small transverse gradient in parallel flow can significantly reduce the critical value of the relative ion-electron field-aligned drift for the current-driven electrostatic ion acoustic modes. It is also shown that the shear-modified ion acoustic mode can be excited without any relative field-aligned drift provided that the flow gradient is sufficiently strong. The instability mechanism can be described in a local limit. The new shear-modified ion-acoustic modes considered in this paper are shown to be different from both the nonresonant mode due to a velocity shear in the parallel flow [D'Angelo, 1965> and the resonant classical current-driven ion-acoustic mode [Fried and Gould, 1961>. The new modes discussed in this paper can be excited for typical ionospheric conditions and a wide range of ion-electron temperature ratios. The reported results may explain ionospheric observations of low-frequency ion-acoustic-like waves, especially for ion-electron temperature ratios of the order of unity and larger when the critical current for the homogeneous current-driven ion acoustic mode is significantly above the observed values. Other possible applications of our results to space plasmas are also discussed. ¿ 1999 American Geophysical Union