In this letter we explore the Higgs instability in the gapless superfluid/superconducting phase. This is in addition to the (chromo)magnetic instability that is related to the fluctuations of the Nambu-Goldstone bosonic fields. While the latter may induce a single-plane-wave LOFF state, the Higgs instability favors spatial inhomogeneity and cannot be removed without a long range force. In the case of the g2SC state the Higgs instability can only be partially removed by the electric Coulomb energy. But this does not exclude the possibility that it can be completely removed in other exotic states such as the gCFL state. 12.38.Aw, 26.60.+c Superfluidity or superconductivity with mismatched Fermi momenta appears in many systems such as the charge neutral dense quark matter, the asymmetric nuclear matter, and in imbalanced cold atomic gases. The mismatch plays the role of breaking the Cooper pairing. But it is not understood how a BCS superconductor is destroyed as the mismatch is increased. It was proposed in the 1960s that the competition between the pair breaking and the pair condensation would induce an unconventional superconducting phase, the Larkin-OvchinnikovFulde-Ferrel (LOFF) state [1]. Recently it was found that if the mismatch is larger than the gap magnitude, a gapless superconducting phase [2,3] or a breached pairing (BP) [4] can be formed in a charge neutral quark matter or in a constrained imbalanced cold atom system, respectively. Another scenario for the ground state at moderate mismatch is the phase separation[5] between of superfluid/superconducting and normal phases.Both gapless superconducting and BP phases exhibit instabilities. The former exhibits a chromomagnetic instability [6,7] while the latter a superfluid density instability [8]. Recent studies have demonstrated that this type of instability is related to the local phase fluctuation of the superconducting order parameter, i.e., the Nambu-Goldstone boson fields [9,10,11,12]. This type of instability induces the formation of the single-planewave FF-like state [13,14,15,16,17].The imbalanced cold atom systems such as the 40 K and 6 Li offer an intriguing experimental opportunity to understand the pair breaking states. However, recent experiments [18] on these systems did not show explicit evidence of the BP state or the LOFF state, rather they produced strong evidence of the phase separation at moderate mismatch. We explain in this letter that the BP state or the FF state maybe prevented to form there because of the Higgs instability induced by the mismatch. The Higgs instability is related to the magnitude fluctuation of the superconducting order parameter, i.e., the Higgs field. It causes spatial inhomogeneity that may lead to phase separation. The Higgs instability was also considered in [20], where it was named "amplitude instability".The Higgs instability is an inhomogeneous extension of the Sarma instability against a homogeneous variation of the order parameter. Consider a system described by the Hamiltonian H with a spontaneous ...