Starting from the linear sigma model with constituent quarks we derive the chiral fluid dynamics where hydrodynamic equations for the quark fluid are coupled to the equation of motion for the order-parameter field. In a static system at thermal equilibrium this model leads to a chiral phase transition which, depending on the choice of the quark-meson coupling constant, could be a crossover or a first order one. We investigate the stability of the chiral fluid in the static and expanding backgrounds by considering the evolution of perturbations with respect to the mean-field solution. In the static background the spectrum of plane-wave perturbations consists of two branches, one corresponding to the sound waves and another to the sigma-meson excitations. For large couplings these two branches cross and the excitation spectrum acquires exponentially growing modes. The stability analysis is also done for the Bjorken-like background solution by explicitly solving the time-dependent differential equation for perturbations in the eta-space. In this case the growth rate of unstable modes is significantly reduced.