Recent satellite observations at high altitudes (>5000 km) in the auroral zone have shown the existence of hybrid or bimodal ion beam distributions that are evidence of both parallel and perpendicular ion acceleration. Acceleration parallel to the magnetic field is most likely due to quasi-static electric fields (double layers) which can create outflowing ion beams; since ions of different mass will have different drift speeds due to this acceleration, a plasma configuration unstable to the ion-ion two-stream acoustic mode develops. When the net drift velocity (U) between the two ion species is greater than the sound speed (Cs), the ion-ion instability has maximum growth at oblique wave propagation. To study the nonlinear effects of the ion-ion instability in terms of plasma heating, a numerical simulation parametric study has been performed. It was found that the parallel acceleration that forms the ion beams occurs on a time scale faster than ion-ion wave growth at low drifts; thus ion-ion wave growth is expected to occur primarily for higher drift speeds (U>Cs), which results in strong oblique heating of the ions (both hydrogen and oxygen) forming elevated ion conics (sometimes called ''bowl'' distributions). Also, strong parallel electron heating in the direction of the ion beams can occur, and electrons near the top of the acceleration region may attain a net upward drift along with the elevated ion conics. Variation of the oxygen density greatly affects the ion heating due to the ion-ion instability; as the oxygen density decreases, oxygen heating increases, in agreement with observations (Collin et al., 1987). Ion-ion electrostatic wave properties and the plasma heating that results over a wide rane of auroral zone parameters are included. ¿ American Geophysical Union 1990