A linear theory of mirror instability accounting for the finite electron temperature effects is developed. Using the standard low-frequency approach to the analysis of this instability but including some kinetic effects, we have derived an expression for the growth rate and analyzed the effects of finite electron temperature and arbitrary electron anisotropy. In comparison with earlier analyses which were limited to isotropic electron distributions, consideration of arbitrary electron anisotropy shows that for sufficiently hot electrons an increased electron temperature enhances the growth rate of the mirror instability. ¿ 2000 American Geophysical Union