Two magnetically insulated ion diodes that utilize a radial applied‐Bfield are described. Both diodes generate an annular beam that is extracted along the diode axis. The first diode operated at 1.2 MV and 600 kA for 25 ns and generated a 300‐kA ion beam. The second operated at 300 kV, 100 kA and generated 15 kA of ion current. The first diode was used to study diode performance as a function of inner and outer anode‐cathode gaps, the applied‐Bfield, and transmission line current ratios. The second diode was used to study anode plasma formation. The diodes were operated belowBcrit, resulting in electron leakage to the anode, especially near the outer cathode. A definition ofBcritapplicable to extraction diodes is given and methods of improving ion production efficiency in these diodes are suggested. The strong correlation of ion production with visible light emission suggests, however, that the electron loss played an important role in anode turn‐on. The breakdown of neutral gas desorbed by electron impact is thought to be the anode plasma production mechanism. The grazing incidence leakage electrons affect the breakdown by significantly enhancing space‐charge‐induced electric fields in the dielectric‐filled anode grooves.