Plasma observations in Saturn's inner magnetosphere imply that ion distributions are highly anisotropic, with T⊥>T∥. Recent improvements in Voyager plasma data analysis routines enable this hypothesis to be tested directly. The assumption of longitudinal symmetry in the ion flux tube content requires anisotropies (T⊥/T∥-1) of about 2 and 5 in the protons and heavy ions, respectively. Observations are consistent with anisotropies in this range. Calculations of Coulomb time scales show that isotropization and energy diffusion time scales of water group ions are longer than the residence time of these ions, whereas similar calculations for protons show that isotropization, energy diffusion, and energy loss times are shorter than the proton loss time. Thus water group ions should be highly anisotropic and non-Maxwellian, whereas proton distributions will approximate isotropic Maxwellians. A steady state kinetic equations in solved analytically for the distribution of perpendicular velocities for H2O+ picked up in Saturn's inner magnetosphere. The velocity distribution thus derived has a broad peak centered at about the corotation energy. We conclude that observational and theoretical evidence both support the hypothesis that large temperature anisotropies exist in Saturn's inner magnetosphere. ¿ American Geophysical Union 1988