A membrane of a dielectric elastomer oscillates when subject to AC voltage. Its oscillation is nonlinear due to large deformation and nonlinear electromechanical coupling. Dynamic instability in dielectric elastomers—the oscillation with an unbounded amplitude—is investigated in this paper. The critical amplitude of AC voltage for dynamic instability varies with the frequency of AC voltage and reaches a valley when the superharmonic, harmonic, or subharmonic resonance is excited. Prestretches can improve dielectric elastomer actuators' capabilities to resist dynamic instability. The critical deformation at the onset of dynamic instability can be much larger than that at the onset of static instability. Oscillation of dielectric elastomers can be used for applications, such as vibration shakers for haptic feedback, soft loudspeakers, soft motors, and soft pumps. We hope that the current analyses can improve the understanding of dynamic behavior of dielectric elastomers and enhance their stability and reliability.