The collisionless electron temperature gradient‐driven instability is studied in the parameter regime relevant for field‐reversed configurations. Perturbations in the electrostatic potential and all three components of the vector potential are considered and fully magnetized models, which include finite beta orbit modifications, are used for electrons and ions. It is shown that the electron temperature gradient can drive unstable modes over a wide range of values of &bgr; and &eegr;e. These modes require a finite (but small)kzand propagate in the direction opposite to the lower hybrid drift.