The thermodynamic dislocation theory presented in preceding papers is used here to describe shear-banding instabilities. Central ingredients of the theory are a thermodynamically defined effective configurational temperature, and a formula for the plastic strain rate determined by thermally activated depinning of entangled dislocations. This plastic strain rate is extremely sensitive to variations of the stress and the ordinary temperature. As a result of this sensitivity, the system undergoes rapid shear banding instabilities when ordinary thermal relaxation is slow. It also undergoes rapid changes from elastic to plastic behaviors at yielding transitions.