Galileo observed a large depression in the background magnetic field during its flyby through Io's plasma wake. Two hypotheses have been put forward to explain the observed magnetic field perturbation. Kivelson et al. [1996a, b] have suggested that although plasma currents are present, Io must possess an internal field in order to explain the large field depression. Frank et al. [1996] on the other hand have suggested that the observed field depression was caused purely by plasma currents generated by Io's interaction with its torus. We present a combined analysis of field and particle data from the flyby. Under certain assumptions, we develop models of Io's interaction with the plasma to calculate the magnetic field resulting from the diamagnetic and non‐diamagnetic effects of the Io‐plasma interaction. If the assumptions are valid, then it must be concluded that the plasma effects can account for only a fraction (< 30%) of the observed depression and that the principal cause of the reduction in the field strength observed along the trajectory of Galileo is a source inside of Io.