A magnetohydrodynamic simulation of Kelvin-Helmholtz instability at the magnetospheric boundary is performed by including inhomogeneities of plasma and magnetic field at the dayside low latitude magnetospheric boundary. A magnetopause current layer is corrugated highly nonlinearly by the instability and a wide velocity boundary layer is formed within the magnetopause current layer, a result being consistent with observations. Interchange of plasma and flux tubes is accomplished by the instability.