It is shown theoretically that stimulated vacuum ultraviolet emission at [inverted lazy s] 1700 Å is possible in the afterglow of a suitably prepared ionized xenon plasma. Our model involves the dissociative recombination ofXe2+as a key step in the kinetic scheme leading to the production of excitedXe2*dimers. It is found that the maximum value of the dimer population occurs for a plasma that is initially [inverted lazy s] 1% ionized with cold gas atoms. Both plasma heating and higher levels of ionization inhibit dimer formation. Excited state‐excited state loss channels are also seen to play an important role in limiting the peak dimer density. Comparison of this theory with recent experimental results involving relativistic electron‐beam‐excited plasmas is good.