During steady-state gait, the instantaneous passive dynamics, quantified using the margin of stability in the anterior-posterior (AP) direction (MOSAP), are unstable. Although the instability indicates that substantial control will be required to reject a perturbation, the instability also allows for forward progression with low energy expenditure when the gait is unperturbed. Here, we examined whether humans control MOSAP to exploit the passive dynamics, and whether they adjust MOSAP when the threat to AP balance is increased. We computed MOSAP for six consecutive steps when healthy young adults performed unobstructed gait trials, and when they approached and crossed an obstacle. Uncontrolled manifold analysis indicated that the extrapolated center of mass and step length co-varied to maintain MOSAP for all steps during unobstructed and obstructed gait. Furthermore, the MOSAP values indicated unstable passive dynamics for all steps except while crossing the obstacle with the leading limb. Based on these results, we concluded that the MOSAP is controlled to exploit the passive dynamics and achieve forward progression at low energetic cost. Finally, MOSAP increased (indicating more stable dynamics) while approaching and crossing the obstacle with the leading limb, and then declined for later steps, indicating a fluid tradeoff between stability and energy efficiency.