The vibration and instability of a thin-walled smart cylinder with internal fluid flow is analyzed. The mathematical modeling is carried out based on nonlinear Donnell’s shell theory and scalar potential function. The governing equations are obtained using energy methods and modal expansion analyses which are then solved using Eigen value problem and numerical integration. In the numerical results section the effects of various parameters such as mean flow velocity, aspect ratio, temperature change and excitation frequency is studied in details. It is hoped that the results of this study play an important role to design new instability alert sensors for fluid conveying pipes.