MHD stability and ion cyclotron heating are investigated in the axisymmetric tandem mirror HIEI, which is a three-cell device with a typical magnetic field strength of 0.05-0.3-0.1-0.3 T, from central cell midplane to outer throat of plug cells. A magnetic divertor configuration introduced in the central cell provides magnetic nulls and stabilizes MHD activities by shorting-out the charge separation in the azimuthal direction. The density fluctuation of m = 1 flute mode is observed to decrease significantly by using the divertor. The stabilization effect of the divertor is stronger as the nulls are located at inner radius. It is observed from the cross correlation measurement that the electrons exhibit E × B motion in unstable plasmas, while they tend to follow the Boltzmann relation in the divertor-stabilized plasmas. The second harmonic ion cyclotron heating is also investigated. In the divertor configuration where the magnetic field strength varies significantly in radial direction, the ICRF waves have a large transverse gradient in amplitudes to enhance the finite Larmor radius effect. The wave propagation and damping are investigated theoretically and experimentally.