We consider the axisymmetric displacement of an ambient fluid by a second input fluid of lower density and lower viscosity in a horizontal porous layer. If the two fluids have been segregated vertically by buoyancy, then the flow becomes self-similar with the input fluid preferentially flowing near the upper boundary. We show that this axisymmetric self-similar flow is stable to angular-dependent perturbations for any viscosity ratio. The Saffman–Taylor instability is suppressed due to the buoyancy segregation of the fluids. The radial extent of the segregated flow is inversely proportional to the viscosity ratio. This horizontal extension of the intrusion eliminates the discontinuity in the pressure gradient between the fluids associated with the viscosity contrast. Hence at late times, viscous fingering is shut down even for arbitrarily small density differences. The stability is confirmed through numerical integration of a coupled problem for the interface shape and the pressure gradient, and through complementary asymptotic analysis, which predicts the decay rate for each mode. The results are extended to anisotropic and vertically heterogeneous layers. The interface may have relatively steep shock-like regions, but the flow is always stable when the fluids have been segregated by buoyancy, as in a uniform layer.