Charge-neutral beams consisting of ions and electrons provide an alternate means to electron beams for active probing of the ionosphere and magnetosphere. Two-dimensional (three-velocity component) simulations are used to determine the properties of the beam and the surrounding plasma during continuous injection. It is shown that the beam electrons act as if they are tied to the field lines, whereas the beam ions are essentially unmagnetized for time scales much smaller than the ion-cyclotron period. As a result, change separation occurs for injection across the field lines. The resultant space-charge fields cause the beam ions to be drawn back into the beam electrons on a time scale of a few ion plasma periods when the beam density is greater than the plasma density. If the mass of the beam ions is also greater than about that of the plasma ions, the plasma ions can be accelerated perpendicular to the magnetic field to energies comparable to the beam energy. Strong heating of the plasma electrons occurs irrespective of the ion beam mass. This electron heating occurs preferentially parallel to the magnetic field for strong magnetic fields. Perpendicular electron heating occurs as the magnetic field is decreased. ¿ American Geophysical Union