This paper deals with the space and time dependent reactor stability problem of neutron flux shape variations due to xenon-135. The effect of modal interaction on stability is investigated for a simple reactor model when the characteristic functions of the wave equation are used in a modal expansion. It is shown that modal interaction may contribute to or detract from stability depending on the circumstances, and that in the case of a very large reactor, stability can be seriously overestimated if modal interaction is neglected.