Observations from the PHOBOS‐2 space‐craft of plasma and magnetic field effects in the solar wind near Mars suggest that a neutral gas (dust?)torus/ring resides along the orbit of the Martian satellite Phobos. Magnetic ‘cavities’(strong decreases of the magnetic field strength) coincident with strong plasma density increases (up to a factor of ten) are observed during the first elliptic transition orbits when the spacecraft approached the Phobos orbits. The characteristic transverse dimension of the structures along the spacecraft orbit is in the range 100–1000 km, ‘Torus effects’ also have characteristics similar to the formation of a bow shock with increases of plasma density and ion temperature, and a characteristic deflection of the ion flow. This suggests a rather strong interaction between the solar wind plasma and plasma near Phobos orbit. The interaction appears quite similar to that of the solar wind with a comet. The oiitgassing of matter from Phobos (and Deimos) is also suggested by plasma observations in the wake/tail of the Martian satellites. Altogether, our observations imply that a neutral gas cloud—possibly also associated with a faint dust ring—exists along the Phobos orbit.