The IMAGE Wideband Imaging Camera (WIC) instrument observed the duskside development of an oval-aligned transpolar auroral arc (TPA) in the Northern Hemisphere (NH) on 16 December 2001 during strong IMF ∣B∣ ~ 18 nT and a generally steady ~56¿ clock angle (positive IMF By and Bz). Observational evidence suggests that the dayside part of the duskside TPA formed due to quasi-continuous merging between the IMF and the lobe magnetic field tailward of the cusp while the nightside part is associated with the Harang discontinuity. The low-altitude CHAMP satellite confirms an upward northward IMF Bz (NBZ) field-aligned current (FAC) over the dayside TPA while associating a downward NBZ current with the region of diminished WIC emissions in between the auroral oval and the TPA. DMSP F14 suggests that the dayside region of the downward NBZ current coincides with precipitating magnetosheath-like ions of reversed energy-latitude dispersion consistent with high-latitude reconnection. SuperDARN observes enhanced ionospheric sunward flows generally centered between the oppositely directed NBZ currents. We associate these flows with a clockwise lobe convection vortex and the dayside part of the TPA. The nightside TPA, however, is related to stagnant or antisunward flow and the upward FAC region of the Harang discontinuity. Cluster observations confirm the simultaneous presence of rotational discontinuities across the duskside magnetopause with changes in the magnetosheath plasma velocity that indicate an active merging region poleward of Cluster. A global MHD simulation generates sunward flow between a pair of opposite FACs on either side of a lobe reconnection site near (X, Y, Z)GSM = (-4.7, 5.4, 10.2) RE thus conforming with Cluster and SuperDARN expectations. The sense of these FACs agrees with the low-altitude NBZ observations.