The linear, normal mode instability of barotropic circular vortices with zero circulation is examined in thef-plane quasigeostrophic equations. Equivalents of Rayleigh's and Fjortoft's criteria and the semicircle theorem for parallel shear flow are given, and the energy equation shows the instability to be barotropic. A new result is that the fastest growing perturbation is often an internal instability, having a finite vertical scale, but may also be an external instability, having no vertical structure. For parallel shear flow the fastest growing perturbation is always an external instability; this is Squire's theorem. Whether the fastest growing perturbation is internal or external depends upon the profile: for mean flow streamfunction profiles which monotonically decrease with radius, the instability is internal for less steep profiles with a broad velocity extremum and external for steep profiles with a narrow velocity extremum. Finite amplitude, numerical model calculations show that this linear instability analysis is not valid very far into the finite amplitude range, and that a barotropic vortex, whose fastest growing perturbation is internal, is vertically fragmented by the instability.