A new isolated‐system, two‐dimensional electrostatic simulation model is used to investigate the plasma environment in the vicinity of a spacecraft during the injection of electron beams. The propagation of the electron beam and the plasma response to the beam injection are found to vary dramatically depending on the ratio of the ambient plasma density to the beam density. When the ambient plasma density is low, most of the beam electrons are drawn back into the spacecraft by the electric field associated with the charging of the spacecraft. Return currents are associated with field‐aligned flow of the ambient electrons and result in regions of charge imbalance away from the spacecraft. The resulting space‐charge fields produce strong perpendicular heating of the ions on a time scale of the ion plasma period, resulting in conical distributions. As the ambient plasma density is increased, the response time of the plasma to the electric fields associated with the beam injection is decreased. The beam is then increasingly neutralized, and the interaction of the beam with the spacecraft is correspondingly reduced. The fraction of the beam particles that propagate away from the vicinity of the spacecraft is increased. When the ambient plasma density is much larger than the beam density, the beam is able to propagate freely into the plasma. Coherent wave structures are produced in the beam near the spacecraft, while further downstream the beam becomes increasingly turbulent.