Ionospheric ions (mainly H+, He+, and O+) escape from the ionosphere and populate the Earth's magnetosphere. Their thermal energies are usually low when they first escape the ionosphere, typically a few electron volt to tens of electron volt, but they are energized in their journey through the magnetosphere. The ionospheric population is variable, and it makes significant contributions to the magnetospheric mass density in key regions where magnetic reconnection is at work. Solar wind—magnetosphere coupling occurs primarily via magnetic reconnection, a key plasma process that enables transfer of mass and energy into the near‐Earth space environment. Reconnection leads to the triggering of magnetospheric storms, auroras, energetic particle precipitation and a host of other magnetospheric phenomena. Several works in the last decades have attempted to statistically quantify the amount of ionospheric plasma supplied to the magnetosphere, including the two key regions where magnetic reconnection occurs: the dayside magnetopause and the magnetotail. Recent in situ observations by the Magnetospheric Multiscale spacecraft and associated modeling have advanced our current understanding of how ionospheric ions alter the magnetic reconnection process, including its onset and efficiency. This article compiles the current understanding of the ionospheric plasma supply to the magnetosphere. It reviews both the quantification of these sources and their effects on the process of magnetic reconnection. It also provides a global description of how the ionospheric ion contribution modifies the way the solar wind couples to the Earth's magnetosphere and how these ions modify the global dynamics of the near‐Earth space environment. Plain Language Summary Above the neutral atmosphere, space is filled with charged particles, which are tied to the Earth's magnetic field. The particles come from two sources, the solar wind and the Earth's upper atmosphere. Most of the solar wind particles are deflected by the Earth´s magnetic field, but some can penetrate into near‐Earth space. The ionized layer of the upper atmosphere is continuously ejecting particles into space, which have low energies and are difficult to measure. We investigate the relative importance of the two charged particle sources for the dynamics of plasma processes in near‐Earth space. In particular, we consider the effects of these sources in magnetic reconnection. Magnetic reconnection allows initially separated plasma regions to become magnetically connected and mix, and converts magnetic energy to kinetic energy of charged particles. Magnetic reconnection is the main driver of geomagnetic activity in the near‐Earth space, and is responsible for the release of energy that drives a variety of space weather effects. We highlight the fact that plasma from the ionized upper atmosphere contributes a significant part of the density in the key regions where magnetic reconnection is at work, and that this contribution is larger when the geomagnetic activity is high. Key Points Ionospheric plasma contributes a significant part of the magnetospheric density in the regions where magnetic reconnection is most frequent Cold and heavy ions of ionospheric origin reduce magnetic reconnection efficiency and modify energy conversion mechanisms The presence of ionospheric ions and their effects on reconnection and magnetospheric dynamics are enhanced during geomagnetic storms