The effect of parallel electric fields on whistler mode wave propagation has been studied. To account for the parallel electric fields, the dispersion equation has been analyzed, and refractive index surfaces for magnetospheric plasma have been constructed. The presence of parallel electric fields deforms the refractive index surfaces which diffuse the energy flow and produce defocusing of the whistler mode waves. The parallel electric field induces an instability in the whistler mode waves propagating through the magnetosphere. The growth or decay of whistler mode instability depends on the direction of parallel electric fields. It is concluded that the analyses of whistler wave records received on the ground should account for the role of parallel electric fields.