Recent satellite observations of electrostatic and magnetic noise in the distant magnetotail (Gurnett et al., 1976) can be explained by the excitation of the lower-hybrid-drift instability. In particular, it is shown that (1) existence conditions for the lower-hybrid-drift instability can be met, (2) the observed frequency spectra and polarization are in good agreement with the predictions of linear theory, and (3) the observed amplitudes of fluctuations are consistent with the nonlinear theory of this mode. Moreover, the observation of this instability suggests that the anomalous transport properties associated with these waves, which are important in many laboratory devices, may play a crucial role in the macroscopic evolution of magnetotail processes such as field line merging, tearing instabilities, or 'fireballs.'