A linear theory of drift mirror instability accounting for the nonzero electron temperature effects is developed. Generalizing our previous approach to the analysis of this instability by accounting for a nonvanishing parallel electric field, we have derived the expressions for the mode frequency and instability growth rate. The origin of the electric field is due to the electron pressure gradient which builds up in a plasma with nonzero electron temperature, because the electrons are dragged by mirror-accelerated protons as they pass from regions of high magnetic flux into those of lower magnetic flux. The electrostatic force drag associated with the parallel electric field provides a substantial reduction of the wave phase velocity and increases the drift mirror instability threshold. It is shown that in a plasma with nonzero electron temperature the drift mirror mode is accompanied by the field-aligned current which varies in phase with the compressional changes in the magnetic field. The transition to the cold electron temperature limit is discussed. ¿ 2001 American Geophysical Union