The effect of heat and mass transfer on the Kelvin–Helmholtz instability between liquid and vapor phases of a fluid has been studied using three different theories: a purely irrotational theory based on the dissipation method, a hybrid irrotational-rotational theory, and an inviscid potential flow theory. These new results are compared with previous results from viscous irrotational theory. The stability criterion is given in terms of the critical value of relative velocity. The system is shown to be unstable when the relative velocity is greater than the critical value of relative velocity; otherwise, it is stable. It is observed that heat and mass transfer has a destabilizing effect on the stability of the system while vapor fraction has a stabilizing effect.