The wave motion of annular liquid sheet in a gas stream was investigated experimentally and theoretically. It was experimentally confirmed that the wave amplitude of the liquid sheet interface grew along the downstream of nozzle and finally brokedown into the fine liquid drops. The wave motion on the gas−liquid interface in the annular liquid sheet, which was related closely with the atomization phenomena, was studied experimentally based on the optical measurement technique and theoretically based on the Kelvin−Helmholtz instability theory. The effect of the inner and outer gas stream velocities on the wave motion was clarified experimentally. The theoretical results qualitatively agreed with the experimental results on the wave number and the growth rate.