AbstractThe cusp ion outflow on Earth has been extensively studied for decades. However, the energy flux associated with the ion outflow, which is of equivalent importance to the number flux or mass flux, has been rarely studied. Here, we present the first systematic study on the cusp ion energy flux and the energy budget along the cusp magnetic flux tube using quasi‐conjunction observations from the Polar and Fast satellites. Significant ion energy fluxes (several 10s mW/ mapped to 100 km altitude) away from the Earth are frequently observed in the mid‐altitude cusp (3–6 Re). Observations at low altitudes (2 Re) show that the upward ion energy flux is associated with ion outflows originating from the ionosphere. In addition, we show that the ion outflows experience intense energization well above the ionosphere. The only possible energy source for this energization is the earthward Poynting flux in mid‐altitude. The electrons are accelerated downward and are another energy sink (not source). The altitude profile of the energy fluxes suggests a transition region between 2 and 4 Re where both ion heating and electron acceleration primarily occur and where significant Poynting flux is dissipated. Analysis of the E/B ratio shows that the Poynting flux is carried by both the Alfven waves and quasi‐static structures. The above results place important constraints on possible local ion energization mechanisms.