The generic equilibrium configuration of the nighttime midlatitude ionosphere consists of an <I>F</I> layer held up against gravity by winds and/or electric fields, and a sporadic <i>E</I> (<I>E<sub>s</sub></I>) layer located by a sheared wind field, which experiences the same electric fields as the <I>F</I> layer. This configuration is subject to two large-scale (e.g. >10 km) "layer instabilities": one of the <I>F</I> layer known as the Perkins instability, and another of the <I>E<sub>s</sub></I> layer which has been called the <I>E<sub>s</sub></I> layer instability. Electric fields on scales larger than (about) 10 km map very efficiently between the <I>E<sub>s</sub></I> and <I>F</I> layers, and the two instabilities have a similar geometry, allowing them to interact with one another. As shown through a linear growth rate analysis, the two most important parameters governing the interaction are the relative horizontal velocity between the <I>E<sub>s</sub></I> and <I>F</I> layers, and the integrated conductivity ratio Σ<sub><I>H</I></sub>/Σ<sub><I>PF</I></sub>, where Σ<sub><I>H</I></sub> and Σ<sub><I>PF</I></sub> are the field line integrated Hall conductivity of the <I>E<sub>s</sub></I> layer, and the field line integrated Pedersen conductivity of the <I>F</I> layer, respectively. For both large and small relative velocities the growth rate was found to be more than double that of the Perkins instability alone, when <span style="border-bottom: 1px solid #000; vertical-align: 50%; font-size: .7em; color: #000;">Σ<sub><I>H</I></sub></span><span style="margin-left: -1.3em; margin-right: .5em; vertical-align: -15%; font-size: .7em; color: #000;">Σ<sub></I>PF</I></sub></span>=1.8. However, the characteristic eigenmode varies considerably with relative velocity, and different nonlinear behavior is expected in these two cases. As a follow up to the linear growth rate analysis, we explore in this article the nonlinear evolution of the unstable coupled system subject to a 200 km wavelength initial perturbation of the <i>F</i> layer, using a two-dimensional numerical solution of the two-fluid equations, as a function of relative horizontal velocity and <span style="border-bottom: 1px solid #000; vertical-align: 50%; font-size: .7em; color: #000;">Σ<sub><I>H</I></sub></span><span style="margin-left: -1.3em; margin-right: .5em; vertical-align: -15%; font-size: .7em; color: #000;">Σ<sub></I>PF</I></sub></span>. We find that when <span style="border-bottom: 1px solid #000; vertical-align: 50%; font-size: .7em; color: #000;">Σ<sub><I>H</I></sub></span><span style="margin-left: -1.3em; margin-right: .5em; vertical-align: -15%; font-size: .7em; color: #000;">Σ<sub></I>PF</I></sub></span>⪝0.5 the Perkins instability is able to control the dynamics and modulate the <I>F</I> layer altitude in 2 to 3 h time. However, the electric fields remain small until the altitude modulation is extremely large, and even then they are not large enough to account for the observations of large midlatitude electric fields. When <span style="border-bottom: 1px solid #000; vertical-align: 50%; font-size: .7em; color: #000;">Σ<sub><I>H</I></sub></span><span style="margin-left: -1.3em; margin-right: .5em; vertical-align: -15%; font-size: .7em; color: #000;">Σ<sub></I>PF</I></sub></span>⪞1 the <I>E<sub>s</sub></I> layer becomes a major contributor to the <I>F</I> layer dynamics. The <I>E<sub>s</sub></I> layer response involves the breaking of a wave, with associated polarization electric fields, which modulate the <I>F</I> layer. Larger electric fields form when the relative velocity between the <I>E<sub>s</sub></I> and <I>F</I> layers is large, whereas larger modulations of the <I>F</I> layer altitude occur when the relative velocity is small. In the latter case the <I>F</I> layer modulation grows almost twice as fast (for <span style="border-bottom: 1px solid #000; vertical-align: 50%; font-size: .7em; color: #000;">Σ<sub><I>H</I></sub></span><span style="margin-left: -1.3em; margin-right: .5em; vertical-align: -15%; font-size: .7em; color: #000;">Σ<sub></I>PF</I></sub></span>=1) as when no <I>E<sub>s</sub></I> layer is present. In the former case the electric fields associated with the <I>E<sub>s</sub></I> layer are large enough to explain the observations (~10 mV/m) , but occur over relatively short temporal and spatial scales. In the former case also there is evidence that the <I>F</I> layer structure may present with a southwestward trace velocity induced by <I>E<sub>s</sub></I> layer motion.