We theoretically predict instability of a zero-dc-current state of the two-dimensional electron system formed on the surface of liquid helium induced by the cyclotron resonance (CR). This conclusion follows from the theoretical analysis of the dc magnetoconductivity which takes into account the contribution from radiation in an exact way. A many-electron model of the dynamic structure factor of the 2D Coulomb liquid is used to describe the influence of strong internal forces acting between electrons. For low electron densities and high amplitudes of the microwave field, the dc magnetoconductivity is shown to become negative in the vicinity of the CR which causes the instability. This effect is strongly suppressed by Coulomb forces in the region of high densities.Microwave-induced resistance oscillations and zeroresistance states (ZRS) observed in a two-dimensional (2D) electron gas subjected to a transverse magnetic field [1-3] represent a surprising discovery in condensed matter physics. A number of theoretical mechanisms have been proposed to explain these oscillations and ZRS [4][5][6][7][8]. Still, by now the origin of the phenomenon is controversial. A crucial result [9], independent of the details of the microscopic mechanism, is that the ZRS can be explained by an assumption that the longitudinal linear response conductivity σ xx is negative in appropriate ranges of the magnetic field B. In this case, a zero-current state is unstable and the system spontaneously develops a nonvanishing local current density.The above noted phenomena were observed in high-quality GaAs/AlGaAs heterostructures. There is another extremely clean 2D electron system formed on the surface of liquid helium which exhibits remarkable quantum magnetotransport phenomena [10] although it is a nondegenerate system of strongly interacting electrons. Since electron gas degeneracy is not a crucial point for some of the theoretical mechanisms explaining ZRS in semiconductor systems, these mechanisms potentially can be applied to surface electrons (SEs) on liquid helium as well. Complementary studies of these phenomena in the system of SEs on liquid helium could help with identification of the origin of ZRS observed in GaAs/AlGaAs heterostructures.It should be noted that another kind of magnetoconductivity oscillations and ZRS (zero-σ xx states to be exact) was already observed in the system of SEs on liquid helium [11,12] when the energy of excitation of the second surface subband ( 2 − 1 ) was tuned to the resonance with the microwave (MW) frequency. These phenomena were explained [13] by nonequilibrium population of the second surface subband which triggers quasielastic intersubband decay processes accompanied by electron scattering against or along the driving force, depending on the ratio ( 2 − 1 ) / ω c (here ω c is the cyclotron frequency). An important evidence for identification of the mechanism of oscillations and ZRS observed for SEs on liquid helium was recently found in studies of the Coulombic effect on positions of conductivity...