We show that the observed high temperature and inhomogeneous structure of the solar corona, as well as the long-term spatial and temporal evolution of coronal features, is economically explained by in situ heating of the coronal plasma via anomalous current dissipation. The basic geometrical structure is a loop configuration heated by nearly field-aligned currents occupying a small fraction of the total loop volume. Energy is transferred from the turbulent convective zone and photosphere, where ..beta..> or approx. =1, into the low-..beta.. corona via the magnetic fields which link the two regimes. The coronal currents are generated initially by relaxation of emerging magnetic flux to the nearly force-free configuration, and subsequent quasi-steady deposition of energy is achieved via induction processes arising from the continual transfer of azimuthal flux to the corona and from direct generation of electric fields along the flux tube by subphotospheric changes in flux linkage. Laboratory experiments show that the current filamentation necessary for this model can occur if the effective resistivity and radiative losses are strongly temperature dependent, as is the case in the solar corona. As a result, local temperature increases lead, via a regenerative process, to further temperature enhancement; the relative ineffectiveness of cross-field thermalmore » trnasport leads to well-localized channels of current flow.« less