Recent experimental results suggest there are at least two distinct bed form initiation processes. Bed forms may be generated from local bed defects that are propagated down and across stream by flow separation processes when sediment transport is patchy and sporadic. Alternatively, bed form development may occur over the whole bed at once when sediment transport is general and widespread. Herein, we critically test a simple model for this latter bed form initiation mode that was originally presented by H.‐K. Liu in 1957 but not tested because of the complex nature of the measurements required. The theory is based on the idea that a moving sand bed might be likened to a dense fluid and that a hydrodynamic instability develops at the interface between the sediment transport layer and the near‐bed fluid, leading to the organization of the transport system into laterally extended, discrete bed forms. Our predicted initial bed form lengths are within 10% of the lengths observed in a series of flume experiments, suggesting that transverse waveforms on sand beds sheared by unidirectional currents can be initiated as an interfacial hydrodynamic instability of Kelvin‐Helmholtz type when the current is sufficiently vigorous to produce general sediment movement, that is, to create a sediment transport layer that acts as a pseudofluid with density composed of solid and fluid components.