We analyze the process of string vacuum destabilization due to instanton induced superpotential couplings which depend linearly on charged fields. These non-perturbative instabilities result in potentials for the D-brane moduli and lead to processes of D-brane recombination, motion and partial moduli stabilization at the non-perturbative vacuum. By using techniques of D-brane instanton calculus, we explicitly compute this scalar potential in toroidal orbifold compactifications with magnetized D-branes by summing over the possible discrete instanton configurations. We illustrate explicitly the resulting dynamics in globally consistent models. These instabilities can have phenomenological applications to breaking hidden sector gauge groups, open string moduli stabilization and supersymmetry breaking. Our results suggest that breaking supersymmetry by Polonyi-like models in string theory is more difficult than expected.
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