The results of our three-dimensional multiscale magnetohydrodynamic (MHD) model describing the interaction of Saturn's magnetosphere with Titan's upper atmosphere and exosphere are presented. The effects of a conducting ionosphere, exospheric mass loading and ion-neutral charge exchange are taken into consideration. Because the ion gyroradius, in general, is not small compared to the radius of Titan the MHD approximation is not strictly applicable. However, it is still useful for the understanding of the general large-scale features of the magnetospheric interaction. The upstream parameters are set for the typical case when Titan is inside the Saturnian magnetosphere. Although Titan certainly does not have a strong intrinsic magnetic field, some observed structures in Titan's wake might be explained by assuming the existence of a small intrinsic magnetic field. Thus we also considered the possibility that Titan has a small intrinsic dipole moment. The results of the simulations are compared with Voyager measurements and provide estimates of the total mass loading and the rate of ion-neutral charge exchange. The simulation results reproduce the overall behavior of the observations, but it is clear that non-MHD effects also play a role in the interaction between Saturn's magnetosphere and Titan. ¿ 1999 American Geophysical Union