The increase of twist helicity by the curl of the Lorentz force in 3‐D time‐dependent reconnection implies a current dynamo effect, which transfers electromagnetic energy into the magnetosphere. Therefore magnetic reconnection is not only a dissipation process (J·E >0) but also a dynamo process (J·E <0), which corresponds to the generation of the field‐aligned current. The dynamo effect is effective if the level of the fluctuations, irregularities and non‐linearity of the plasma in the reconnection region is high. In this case the turbulent plasma with a finite diffusivity can be reorganized to a near force‐ and torque‐free state in the multiple reconnection sites. The current dynamo effect during reconnection gives an explanation for the diversion and disruption of the magnetopause current and the formation of large and small twisted magnetic flux tubes (so called FTEs, mini‐FTEs or impulsive penetration) at the magnetopause. An “overlap‐reconnect‐twist” dynamo process is suggested. The theory of the conversion and approximate conservation of the magnetic helicity during reconnection is used to estimate the average dynamo effect. During magnetic reconnection, the induced electric field consists of the convection electric field (Ec) and the time‐dependent electric field (Ei(X, t)), which correspond to the diffusion (J·Ec > 0) and dynamo processes (<∫J·EidV> <0)respectively.