Uniform shear flow is a prototype nonequilibrium state admitting detailed study at both the macroscopic and microscopic levels via theory and computer simulation. It is shown that the hydrodynamic equations for this state have a long wavelength instability. This result is obtained first from the Navier-Stokes equations and shown to apply at both low and high densities. Next, higher order rheological effects are included using a model kinetic theory. The results are compared favorably to those from Monte Carlo simulation.