A high‐voltage sheath of a conducting body in space is relevant to several space applications, such as electron beam ejections, charge neutralization on bodies, and the electrodynamic tether. The acceleration of electrons to relatively high energies inside the sheath causes ionization of the neutral gas constituents by electron‐neutral (e‐n) impacts. This in turn greatly modifies the sheath structure, including the dynamics of the charged particles inside the sheath. Artificial neutral gas releases have been used in several space experiments for the purpose of enhancing the electron collection by bodies (electrodes) in space. In this paper, the effects of ionization of a neutral gas on the plasma dynamics and the collection of electrons by a high‐voltage electrode are studied theoretically. The study is based on a one‐dimensional radial model in which time‐dependent hydrodynamic plasma equations are solved self‐consistently with the Poisson equation. The electrons originating from the ambient plasma and those produced by the ionization of the neutral gas are treated as separate fluids. The effects of the ionization on the sheath greatly depend on the neutral gas density. For sufficiently low densities, ionization has hardly any effect on the sheath. In this case, the current collection is given by collisionless sheath theories. For very high densities, collisionless description of the plasma is not valid and the current collection is limited by the e‐n collisions. For moderate densities, the ionization drives several plasma processes in the sheath, which are (1) recurrent sheath expansion, (2) recurrent evolution of potential distribution from a thin sheath to an extended distribution having a double layer and/or a “hump”, (3) formation of oscillatory density structure in the ion density profile near the low potential end of the sheath in a highly nonuniform, expanding, dense plasma, (4) enhancements and disruptions in electron current collection, and (5) plasma expansion with multiple expansion fronts. The oscillatory density structure and the recurrent behavior are interpreted in terms of an ion wave instability driven by counterstreaming electron and ion beams near the low potential end of the sheath. The instability becomes very effective when the plasma density is enhanced by the trapping of the ionization‐produced electrons inside the sheath, because its growth rate γ ∼ωpi, where ω pi is ion plasma frequency. The wave grows as it convects with the expanding ion beam. When the ion wave is amplified because of the enhanced growth rate following a substantial increase in the plasma density by the trapping, the sheath expansion is disrupted and the sheath thins. The continued ionization leads to the further expansion and the recurrent behavior.