The time-asymptotic linear stability of pulsatile flow in a channel with compliant walls is studied together with the evaluation of modal transient growth within the pulsation period of the basic flow as well as non-modal transient growth. Both one (vertical-displacement) and two (vertical and axial) degrees-of-freedom compliant-wall models are implemented. Two approaches are developed to study the dynamics of the coupled fluid–structure system, the first being a Floquet analysis in which disturbances are decomposed into a product of exponential growth and a sum of harmonics, while the second is a time-stepping technique for the evolution of the fundamental solution (monodromy) matrix. A parametric study of stability in the non-dimensional parameter space, principally defined by Reynolds number ($Re$), Womersley number ($Wo$) and amplitude of the applied pressure modulation ($\unicode[STIX]{x1D6EC}$), is then conducted for compliant walls of fixed geometric and material properties. The flow through a rigid channel is shown to be destabilized by pulsation for low $Wo$, stabilized due to Stokes-layer effects at intermediate $Wo$, while the critical $Re$ approaches the steady Poiseuille-flow result at high $Wo$, and that these effects are made more pronounced by increasing $\unicode[STIX]{x1D6EC}$. Wall flexibility is shown to be stabilizing throughout the $Wo$ range but, for the relatively stiff wall used, is more effective at high $Wo$. Axial displacements are shown to have negligible effect on the results based upon only vertical deformation of the compliant wall. The effect of structural damping in the compliant-wall dynamics is destabilizing, thereby suggesting that the dominant inflectional (Rayleigh) instability is of the Class A (negative-energy) type. It is shown that very high levels of modal transient growth can occur at low $Wo$, and this mechanism could therefore be more important than asymptotic amplification in causing transition to turbulent flow for two-dimensional disturbances. Wall flexibility is shown to ameliorate mildly this phenomenon. As $Wo$ is increased, modal transient growth becomes progressively less important and the non-modal mechanism can cause similar levels of transient growth. We also show that oblique waves having non-zero transverse wavenumbers are stable to higher values of critical $Re$ than their two-dimensional counterparts. Finally, we identify an additional instability branch at high $Re$ that corresponds to wall-based travelling-wave flutter. We show that this is stabilized by the inclusion of structural damping, thereby confirming that it is of the Class B (positive-energy) instability type.