Magnetic variations observed at the Earth's surface are caused by external and internal sources. External variations arise from currents in the ionosphere and magnetosphere, and internal variations arise from currents induced in the solid Earth. In this paper we examine how large the internal contribution is to magnetic variations measured at the Earth's surface. We use IMAGE magnetometer measurements to analyze 77 substorms during 1997. For each event we evaluate the internal and external parts of a locally derived auroral electrojet index (IL index). The magnetic field separation is performed using the Siebert-Kertz equations. A superposed epoch analysis of all events clearly shows that the internal contribution peaks strongly at substorm onset, when the internal contribution is ~40% of the total field. After the substorm peak intensity, the internal contribution decreases almost linearly to the quiet time value of 10--20%. The induction effects are largest during the times of rapid changes and at stations located over the Arctic Ocean. ¿ 2001 American Geophysical Union