Partially ionized plasma is a common occurrence in astrophysical and space environments. The emergence and development of plasma instabilities are significantly impacted by the inelastic collisions between the ions and neutrals in the partially ionized plasma, such as the charge exchange. In this study, the effect of the ion–neutral collisions on the sheared E × B flow was experimentally investigated. In the weak collision range, the shear-driven plasma instability, such as Kelvin–Helmholtz instability, was excited by the velocity-sheared flow. However, increasing ion–neutral collisions resulted in a decrease in the magnitude of the sheared E × B flow due to charge exchange–induced drag forces. Consequently, the Kelvin–Helmholtz instability is suppressed, and the Rayleigh–Taylor instability is triggered. The underlying mechanism was elucidated through experimental findings and numerical analysis. The result of this study proposes that a transition between the two modes occurred with increasing ion–neutral collision strength. It could be applied to the study of the solar chromosphere and prominence and planetary ionospheres, where plasma is partially ionized and the sheared E × B flow is often encountered.