Pressure fluctuations may develop in the hydraulic system of automatic transmissions, even under steady-state conditions. To analyze this phenomenon, a dynamic model was developed for a system which consists of a variable-displacement vane-pump, a regulator, and a resistive load. The model was linearized and reduced to generate a stability criterion for the pressure-regulation circuit. This criterion determines a critical frequency that the natural frequency of the pressure-regulation valve must exceed to assure stability. This critical frequency depends primarily on the damping of the spool of the pressure-regulation valve and on its position; the latter is a function of the regulation-chamber leakage characteristics. The analysis shows that line pressure, flow and leakage, along with production tolerances and different opening conditions, have a significant effect on the stability of the hydraulic system. Test data support the analysis.