One of the most fundamental interfacial instabilities in ideal, immiscible, incompressible multifluid flows is the celebrated Kelvin–Helmholtz (KH) instability. It predicts short-wave instabilities that, in the absence of other mollifying physical mechanisms (e.g. surface tension, viscosity), render the nonlinear problem ill-posed and lead to finite-time singularities. The crucial driving mechanism is the jump in tangential velocity across the liquid–liquid interface, i.e. interfacial slip, that can occur since viscosity is absent. The purpose of the present work is to analyse analogous instabilities for viscous flows at small or moderate Reynolds numbers as opposed to the infinite Reynolds numbers that underpin KH instabilities. The problem is physically motivated by both experiments and simulations. The fundamental model considered consists of two superposed viscous, incompressible, immiscible fluid layers sheared in a plane Couette flow configuration, with slip present at the deforming liquid–liquid interface. The origin of slip in viscous flows has been observed in experiments and molecular dynamics simulations, and can be modelled by employing a Navier-slip boundary condition at the liquid–liquid interface. The emerging novel instabilities are studied in detail here. The linear stability of the system is addressed asymptotically for long- and short-waves, and for arbitrary wavenumbers using a combination of analytical and numerical calculations. Slip is found to be capable of destabilising perturbations of all wavelengths. In regimes where the flow is stable to perturbations of all wavelengths in the absence of slip, its presence can induce a Turing-type instability by destabilization of a small band of finite wavenumber perturbations. In the case where the underlying layer is asymptotically thin, the results are found to agree with the linear properties of a weakly non-linear asymptotic model that is also derived here. The weakly nonlinear model extends previous work by the authors that had a thin overlying layer that produces a different evolution equation.