A multifluid model is used to investigate how Saturn's magnetosphere affects ionosphere. The model includes a magnetospheric plasma temperature of 2eV as a boundary condition. The main results are: (1) H+ ions are accelerated along magnetic field lines by ambipolar electric fields and centrifugal force, and have an upward velocity of about 10km/s at 8000km; (2) the ionospheric plasma temperature is 10,000K at 5000km, and is significantly affected by magnetospheric heat flow at high altitudes; (3) modeled electron densities agree with densities from occultation observations if the maximum neutral temperature at a latitude of 54˚ is about 900K or if electrons are heated near an altitude of 2500km; (4) electron heating rates from photoelectrons (≈100K/s) can also give agreement with observed electron densities when the maximum neutral temperature is lower than 700K (note that Cassini observations give 520K); and (5) the ion temperature is high at altitudes above 4000km and is almost the same as the electron temperature. The ionospheric height-integrated Pedersen conductivity, which affects the magnetospheric plasma velocity, varies with local time with values between 0.4 and 10S. We suggest that the sub-corotating ion velocity in the inner magnetosphere depends on the local time, because the conductivity generated by dust–plasma interactions in the inner magnetosphere is almost comparable to the ionospheric conductivity. This indicates that magnetosphere–ionosphere coupling is highly important in the Saturn system.