Auroral hiss is one of the most intense whistler mode plasma wave phenomena observed both on the ground at high latitudes and on spacecraft in the auroral zone. Propagation of auroral hiss from its source region to the ground is poorly understood. The standard whistler mode propagation in a smooth magnetosphere predicts that auroral hiss generated at large wave-normal angles along the auroral field lines by Cerenkov resonance cannot penetrate to the ground. We show that the presence of density depletions along the field lines in the auroral zone and meter-scale density irregularities at altitudes 5000--20,000 km) propagates to lower altitudes (<3000--5000 km) in two modes: (1) a ducted mode guided by field-aligned density depletions and (2) a nonducted mode. The hiss with large wave-normal angle arriving at <5000 km altitude is scattered by meter-scale irregularities, and about 0.1% to 10% of the scattered hiss has small wave-normal angles which can penetrate to the ground. Our mechanism explains the following features of auroral hiss observed on the ground: (1) the characteristic spectra of continuous and impulsive auroral hiss, (2) the upper and lower frequency cutoffs, (3) the dispersion of impulsive auroral hiss, (4) the location of ionospheric exit points of auroral hiss with respect to visible aurora, and (5) the 2--5 order of magnitude intensity decrease of auroral hiss observed on the ground relative to that observed on spacecraft. Based on the model presented here, we provide methods to infer parameters of density depletions and intensity of lower hybrid waves stimulated by auroral hiss from the ground measurements of auroral hiss together with optical and radar measurements. ¿ 2000 American Geophysical Union