This article will provide essential concepts for a basic understanding of the nonlinear dynamics of microwave circuits, so that a designer may distinguish between different types of steady‐state solutions, identify instability problems, and comprehend mechanisms for instability. The aim is to increase a designer's awareness and knowledge on what can go on in a nonlinear circuit. The harmonic‐balance method will be briefly outlined, with emphasis on the need to combine this method with a stability analysis to ensure the physical existence of any solution obtained. The article will cover the stability analysis of microwave circuits in small‐ and large‐signal regimes. The main approaches for stability analysis will be presented and compared, from the most familiar ones, Rollet factor and stability circles, to very recent and efficient techniques, such as pole‐zero identification. Another problem covered will be the abrupt change in the solution observed when a parameter, such as a bias voltage or input power, is modified continuously.