An introductory review of theories of plasma instabilities in the magnetosphere is presented. PartAis a review of theories of plasma instabilities that are relevant to magnetospheric plasmas. Instabilities arising from velocity‐distribution anisotropies, such as a pitch‐angle anisotropy or the presence of beams, as well as instabilities from nonuniform distributions of plasmas and magnetic fields, are discussed. Particular emphasis is placed on the effect of a mixture of a cold plasma in a high‐β plasma. PartBis a summary of works related to actual plasma instabilities in the magnetosphere. In view of the observed plasma parameters, it is shown that the magnetosphere is rather stable against most macroscopic instabilities, and its dynamics are predominantly governed by microscopic instabi