An algorithm for determining ionospheric currents at high latitudes from magnetic measurements made by low altitude satellites is presented and illustrated using MAGSAT data. The ionospheric currents are assumed to flow in a height of 115 km perpendicular to the orbit plane of the satellite, which corresponds to East‐West direction in the case of the dawn/dusk MAGSAT orbit. The method allows for studying the time development of both the strength and the location of the auroral electrojets. Application to 13 days of MAGSAT data in winter 1979 yields a correlation coefficient of r=0.88 between the AE‐index and the strength of the auroral electrojets; their latitudinal location moves southward with increasing magnetospheric ring current as measured by the D_st ‐index.