One‐dimensional particle simulations of a finite‐length free electron laser show that the convectively‐unstable, short‐wavelength mode is the dominant instability initially for systems long compared with the growth length of the mode. Also, a generalized one‐dimensional linear theory of a finite length system has been derived with all kinetic effects included. Comparison between the unstable modes seen in the simulation and those predicted by this theory are in good agreement. However, the simulations show a significantly higher efficiency than that predicted by the theory when trapping by a single mode is the saturation mechanism. This may be caused by a local dc electric field (space charge fields) that arises self‐consistently as the beam slows down.