The linear and quasi‐linear theory of perturbations in finite‐β, collisionless plasmas that incorporate a sheared velocity flow is developed. A simple, one‐dimensional magnetic field geometry is assumed to adequately represent solar wind conditions near the sun, i.e., atR≈ 0.3 AU. Two modes are examined in detail: an ion‐acoustic mode (finite‐β stabilized) and a compressional Alfvén mode (finite‐β threshold, high‐β stabilization). The role played by equilibrium temperature anisotropies, in the linear stability of these modes, is also presented. From the quasi‐linear theory, the effects of waves on the state of temperature components (parallel and perpendicular to the magnetic field) of the solar wind is determined: qualitative agreement with the observed anisotropies of electrons and ions is obtained. The quasi‐linear temperature changes are also shown to result in saturatio