The electron cyclotron maser instability (CMI) driven by momentum space anisotropy, ∂f/∂p⊥ > 0, has been invoked to explain many aspects, such as the modes of propagation, harmonic emissions, and the source characteristics of the auroral kilometric radiation (AKR). Recent satellite observations of AKR sources indicate that the source regions are often imbedded within the auroral acceleration region characterized by the presence of a field‐aligned potential drop. In this paper we investigate the excitation of the fundamental extraordinary mode radiation due to the accelerated electrons. The momentum space distribution of these energetic electrons is modeled by a realistic upward loss cone as modified by the presence of a parallel potential drop below the observation point. On the basis of linear growth rate calculations we present the emission characteristics, such as the frequency spectrum and the emission angular distribution as functions of the plasma parameters. We will discuss the implication of our results on the generation of the AKR from the edges of the auroral density cavities.