A finite element dynamic instability analysis of stiffened shell panels with cutout subjected to uniform in-plane harmonic edge loading along the two opposite edges is presented in this paper. The eight-noded isoparametric degenerated shell element and a compatible three-noded curved beam element are used to model the shell panels and the stiffeners, respectively. As the usual formulation of degenerated beam element is found to overestimate the torsional rigidity, an attempt has been made to reformulate it in an efficient manner. Moreover the new formulation for the beam element requires five degrees of freedom per node as that of shell element. Bolotin method is applied to analyze the dynamic instability regions. Numerical results of convergence studies are presented and comparison is made with the published results from literature. The effects of various parameters such as shell geometry, radius of curvature, cutout size, stiffening scheme, and dynamic load factors are considered in dynamic instability analysis of stiffened shell panels with cutout. The free vibration and static stability (buckling) results are also presented. With the consideration of radius of curvatures the panels reduce from deep shell case to shallow shell case and finally become flat plate.