Formation of the theta aurora, which appears under the conditions of northward interplanetary magnetic field (IMF) and greater IMF magnitude, is investigated from the analysis of solutions obtained from a magnetohydrodynamic (MHD) simulation. The theta aurora formation is caused by a transient convection after a sign change of IMF By. This transient convection must include a replacement of lobe field lines from old IMF originating fields to new IMF originating fields, a rotation of plasma sheet to opposite inclination, and a reformation of ionospheric convection cells. In the midst of these reconfigurations, old and new convection systems must coexist in the magnetosphere-ionosphere system. In this stage the polar cap and tail lobes are continuously encroached by the new open field lines connected to the new IMF. Whereas magnetic field lines accumulated in new lobes tend to rotate the outer plasma sheet in the opposite direction, the old merging-cell convection still continues to generate closed field lines that must return to dayside against the new lobe formation. As time goes on, the growth of new lobes results in the blocking of the return path toward the dayside of closed field lines generated in the old merging cell to form the kink structure in the plasma sheet. Losing their return path, these closed field lines generated from old lobes accumulate on the nightside. The transpolar arc (TPA) appears at the footpoints of these accumulated closed field lines. In the tail plasma sheet the cross-tail Z configuration and kink structures are generated because the plasma sheet near the magnetopause is rotated to the opposite direction while the core part is retaining old rotation.