In this paper, we give an explicit second variation formula for a biharmonic hypersurface in a Riamannian manifold similar to that of a minimal hypersurface. We then use the second variation formula to compute the stability index of the known biharmonic hypersurfaces in a Euclidean sphere, and to prove the non-existence of unstable proper biharmonic hypersurface in a Euclidean space or a hyperbolic space, which adds another special case to support Chens conjecture on biharmonic submanifolds.