Observations of continuous radio and sporadic X-ray emission from low-mass objects suggest they harbor localized plasmas in their atmospheric environments. For low-mass objects, the degree of thermal ionization is insufficient to qualify the ionized component as a plasma, posing the question: what ionization processes can efficiently produce the required plasma that is the source of the radiation? We propose Alfvén ionization as a mechanism for producing localized pockets of ionized gas in the atmosphere, having sufficient degrees of ionization (≥10–7) that they constitute plasmas. We outline the criteria required for Alfvén ionization and demonstrate its applicability in the atmospheres of low-mass objects such as giant gas planets, brown dwarfs, and M dwarfs with both solar and sub-solar metallicities. We find that Alfvén ionization is most efficient at mid to low atmospheric pressures where a seed plasma is easier to magnetize and the pressure gradients needed to drive the required neutral flows are the smallest. For the model atmospheres considered, our results show that degrees of ionization of 10–6-1 can be obtained as a result of Alfvén ionization. Observable consequences include continuum bremsstrahlung emission, superimposed with spectral lines from the plasma ion species (e.g., He, Mg, H2, or CO lines). Forbidden lines are also expected from the metastable population. The presence of an atmospheric plasma opens the door to a multitude of plasma and chemical processes not yet considered in current atmospheric models. The occurrence of Alfvén ionization may also be applicable to other astrophysical environments such as protoplanetary disks.