The stability of miscible two-fluid flow in a horizontal channel is examined. The flow dynamics are governed by the continuity and Navier-Stokes equations coupled to a convective-diffusion equation for the concentration of the more viscous fluid through a concentration-dependent viscosity. Our analysis of the flow in the linear regime delineates the presence of convective and absolute instabilities and identifies the vertical gradients of viscosity perturbations as the main destabilizing influence in agreement with previous work. Our transient numerical simulations demonstrate the development of complex dynamics in the nonlinear regime, characterized by roll-up phenomena and intense convective mixing; these become pronounced with increasing flow rate and viscosity ratio, as well as weak diffusion. © 2009 American Institute of Physics.