Using ion–electron fluid parameters derived from Cassini Plasma Spectrometer (CAPS) observations within Saturn's inner magnetosphere as presented in Sittler et al. 2006a. Cassini observations of Saturn's inner plasmasphere: Saturn orbit insertion results. Planet. Space Sci., 54, 1197–1210, one can estimate the ion total flux tube content, N ION L 2, for protons, H +, and water group ions, W +, as a function of radial distance or dipole L shell. In Sittler et al. 2005. Preliminary results on Saturn's inner plasmasphere as observed by Cassini: comparison with Voyager. Geophys. Res. Lett. 32(14), L14S04), it was shown that protons and water group ions dominated the plasmasphere composition. Using the ion–electron fluid parameters as boundary condition for each L shell traversed by the Cassini spacecraft, we self-consistently solve for the ambipolar electric field and the ion distribution along each of those field lines. Temperature anisotropies from Voyager plasma observations are used with ( T ⊥ / T ∥ ) W + ∼ 5 and ( T ⊥ / T ∥ ) H + ∼ 2 . The radio and plasma wave science (RPWS) electron density observations from previous publications are used to indirectly confirm usage of the above temperature anisotropies for water group ions and protons. In the case of electrons we assume they are isotropic due to their short scattering time scales. When the above is done, our calculation show N ION L 2 for H + and W + peaking near Dione's L shell with values similar to that found from Voyager plasma observations. We are able to show that water molecules are the dominant source of ions within Saturn's inner magnetosphere. We estimate the ion production rate S ION∼10 27 ions/s as function of dipole L using N H + , N W + and the time scale for ion loss due to radial transport τ D and ion–electron recombination τ REC. The ion production shows localized peaks near the L shells of Tethys, Dione and Rhea, but not Enceladus. We then estimate the neutral production rate, S W, from our ion production rate, S ION, and the time scale for loss of neutrals by ionization, τ ION, and charge exchange, τ CH. The estimated source rate for water molecules shows a pronounced peak near Enceladus’ L shell L∼4, with a value S W∼2×10 28 mol/s.