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Explosive magnetotail activity has long been understood in the context of its auroral manifestations. While global models have been used to interpret and understand many magnetospheric processes, the temporal and spatial scales of some auroral forms have been inaccessible to global modeling creating a gulf between observational and theoretical studies of these phenomena. We present here an important step toward bridging this gulf using a newly developed global magnetosphere‐ionosphere model with resolution capturing30 km azimuthal scales in the auroral zone. In a global magnetohydrodynamic (MHD) simulation of the growth phase of a synthetic substorm, we find the self‐consistent formation and destabilization of localized magnetic field minima in the near‐Earth magnetotail. We demonstrate that this destabilization is due to ballooning‐interchange instability which drives earthward entropy bubbles with embedded magnetic fronts. Finally, we show that these bubbles create localized field‐aligned current structures that manifest in the ionosphere with properties matching observed auroral beads.