The solar wind in the outer heliosphere is fundamentally different from that in the inner heliosphere, with the influence from the local interstellar medium becoming significant. Observational evidence of pickup ions has accumulated as Voyager 2 continues its journey to the interstellar medium. Specifically, the nonadiabatic solar wind proton temperature profile, the slowdown of the solar wind, and an increased pressure associated with pickup ions are the manifestations of pickup ions in the outer heliosphere. In order to understand the solar wind in the outer heliosphere, we extend the three-fluid model first proposed by Isenberg [1986> to include the energy sharing between the solar wind protons and pickup ions. For simplicity, we introduce a parameter, the energy partition ratio &egr;, to represent the division of the total energy provided by the pickup process between the solar wind protons and pickup ions. We find that only a small percentage of this total thermal energy is needed to heat the solar wind proton to produce the observed temperature profile. As expected, the higher the interstellar neutral hydrogen density, the smaller the percentage. The energy partition ratio has little effect on the slowdown of the solar wind and the pickup ion density distribution in the outer heliosphere, which is primarily controlled by the interstellar neutral hydrogen density. As far as the slowdown is concerned, a neutral hydrogen density of nH∞=0.08 cm-3 at the termination shock gives the best match to the observations [Wang et al., 2000>. In this case, the pickup ion density at 40 AU is also of the order of that estimated by Burlaga et al. [1996>, and the energy partition ratio &egr;=0.05 gives the best fit to the observed proton temperature profile. ¿ 2001 American Geophysical Union