Large‐scale temporal oscillations are observed in the output of high‐energy flowing cw CO2lasers, causing appreciable reduction in power output and optical‐beam quality. The modulation is linked to wavelike disturbances in the optical cavity which propagate either along the flow axis or transverse to both optical and flow axes. These waves, caused by an unstable interaction between the radiation field and the laser medium, are referred to as the mode‐medium instability. The present analysis examines transverse waves that are associated with interactions between optical resonator modes and acoustic resonator modes. The modes interact through fluctuations in gain and refractive gradients due to the heat release during lower‐laser‐level collisional deactivation. This can lead to unstable acoustic wave growth. Two important propagation numbers,k0andkm, emerge from the analysis. They define a region of unstable wave growth forkbetweenk0andkm. The instability growth rate is maximum nearkmand is zero atk0. It appears possible to minimize the instability by adjusting the laser parameters so thatk0andkmcoincide.