In this study, flow induced vibration and instability of embedded double carbon nano-tube system (DCNTS) is investigated based on Eringen’s nonlocal elasticity theory and Timoshenko beam model. The DCNTS is modeled as two parallel hollow tubes with a circular cross section which are continuously connected with a visco Pasternak elastic layer and placed in a surrounded Winkler elastic medium. An internal fluid flow with constant fluid velocity is conveyed through one of the nanotubes. In order to obtain more accurate results, effects of slip condition of fluid flow are also takes into accounts using the Knudsen number (Kn ) . Using Hamilton principle, the coupled partial differential equations of motion are derived and consequently discretized using the differential quadrature (DQ) method. In the numerical results the effects of small scale parameter, Knudsen number, thermal gradient, fluid density and aspect ratio on natural frequency and critical flow velocity are studied in details. The results significantly showed that the internal fluid flow plays an important role in the instability of the DCNTS. In addition it has been found that increasing the value of Kn and aspect ratio will be decreased the critical flow velocity of the DCNTS.