Linear and nonlinear evolution of gradient drift instabilities, responsible for type II irregularities in the equatorial electrojet, are discussed for the nighttime density profile obtained by rocket flights at Alcantara, Brazil, during the 1994 Guara Campaign. In contrast with the daytime case, the nighttime density profile is quite jagged. The jaggedness implies strong density gradients which excite short-wavelength instabilities with large growth rates. The most unstable waves have horizontal wavelengths in the range 10--20 m. Linear instabilities with much larger horizontal wavelengths, equal to and greater than 1 km, also occur, but their growth rates are smaller. In contrast with short waves that tend to localize themselves in narrow vertical regions where the density gradient is favorable for instability, the long waves have broad vertical extent, spanning regions that have density gradients favorable as well as unfavorable for instability. Despite the larger linear growth rates of the short waves (10--20 m), nonlinear numerical simulations exhibit significant kilometer-scale structures in the turbulently saturated state. The saturated power spectrum is anisotropic in the plane perpendicular to the ambient magnetic field. Kilometer-scale structures are realized by a balance between the linear instability drive of long waves and the diffusive damping of short waves produced by mode coupling. The ability of the long waves to fill out the vertical layer, spanning regions in which the density gradients are favorable as well as unfavorable for stability, makes them survive the mode competition in the nonlinear regime. Thus the saturated fluctuations in the nighttime show a preponderance 2- to 4-km structures (which are somewhat longer than those seen in the daytime), qualitatively consistent with observations. ¿ 1999 American Geophysical Union