Abstract. Ionospheric two-stream waves and gradientdrift waves nonlinearly drive a large-scale (D.C.) current in the E-region ionosphere. This current flows parallel to, and with a comparable magnitude to, the fundamental Pedersen current. Evidence for the existence and magnitude of wave-driven currents derives from a theoretical understanding of E-region waves, supported by a series of nonlinear 2D simulations of two-stream waves and by data collected by rocket instruments in the equatorial electrojet. Wave-driven currents will modify the large-scale dynamics of the equatorial electrojet during highly active periods. A simple model shows how a wave-driven current appreciably reduces the horizontally flowing electron current of the electrojet. This reduction may account for the observation that type-I radar echoes almost always have a Doppler velocity close to the acoustic speed, and also for the rocket observation that electrojet regions containing gradientdrift waves do not appear also to contain horizontally propagating two-stream waves. Additionally, a simple model of a gradient-drift instability shows that wavedriven currents can cause nonsinusoidal electric fields similar to those measured in situ.