The effects of an inhomogeneous background magnetic field and resistivity oh finite-amplitude Alfvén waves are studied in terms of the derivative nonlinear Schrödinger equation. It is shown that a weak inhomogeneity in the background magnetic field introduces a perpendicular shear in the resulting waves. This causes the waves to split apart, and a longitudinal current, which increases linearly in time, is produced as a consequence. Resistivity, however, restricts this unbounded growth of current and causes the waves and the current to decay exponentially at later times. The connection of these results to previous results on the Alfvén continuum and low-frequency current drive are discussed in the paper. In the paper the effects of resistivity on the modulational instability of time harmonic solutions of the derivative nonlinear Schrödinger equation are also explored. Both numerical and analytical results indicate that resistivity will decrease the growth rate of envelope perturbations. At large enough values, it can even suppress the perturbations. © 1995 American Institute of Physics.