We present observations and anlysis of the composition, energy spectra and spatial distribution of energetic ions (>0.2 MeV/nucleon) in Saturn's magnetosphere outside of ~4 RS. Our results are based on data from the low-energy particle telescope (LEPT), one of the two sensors of the low-energy charged particle (LECP) experiment on Voyager 1 and 2. The major species, in order of abundance, are H, H2+, He, H3+, C, and O. The energy spectra of the magnetospheric ions are typically very soft (&ggr;~6-7), with an apparent cutoff in energy/charge at 1--2 MeV/e. From the abundance ratios we conclude that the energetic He, C, and O ions have a solar wind origin. The molecular hydrogen ions H2+, and H3+ probably originate from Saturn's upper ionosphere. The protons can originate from the solar wind, the ionosphere or the hydrogen atom torus in Saturn's outer magnetosphere. The local H+ sources apparently were dominant at the time of Voyager 1 encouter, but the solar wind may also have been an important source at the time of Voyager 2. To explain the fact that the energetic heavy ions (Z≥6, E>0.2 MeV/nucleon) are apparently of solar wind origin, an acceleration process that favors ions with small mass/charge ionized solar wind particles even though singly or doubly charged local ions (e.g. O+, O++, N+, etc.) have been observed to be much more abundant in the low-energy magnetospheric plasma. Energization may involve a two-step process of electrostatic iacceleration in the tail region combined with inward radial diffusion. The fluxes of all species decreased inside the orbit of Dione and were nearlly wiped out in the ''slot'' region within the orbit of Tethys. Both satellite absorption and precipitation due to pitch angle scattering may be important loss processes in that region. In comparison with the atomic ions, the decline in the flux of H2+ ions began at a large L value (L~8) and proceeded more rapidly the decreasing L. The cause is apparently dissociation due to impact with the electrons and ions in the inner plasma torus. In the outer magnetosphere (L>9), photodissociation by impact the neutral H atoms is faster for H2+ ions in the lowest vibrational state. The ground state lifetime (~23 days) places a limit of ~10--100 days on the mean overall residencetime for energetic ions in Saturn's magnetosphere.