Aerodynamic interference occurs when biplane wings are placed close to each other. Investigating aerodynamic interference on the transonic flutter characteristics of these wings is an important issue. A numerical model is configured with the rigid airfoil positioned above the elastic airfoil at different positions to simulate various levels of aerodynamic interference. The flutter characteristics of the elastic airfoil are analyzed using an efficient aeroelastic analysis method based on the reduced order model. The results suggest that when the rigid airfoil is positioned directly above the elastic airfoil the aerodynamic interference accelerates the airflow on the upper surface of the elastic airfoil. This leads to a subsonic dip phenomenon, and the instability mode after the subsonic dip gradually transitions from first order to second order. Furthermore, aerodynamic interference leads to an earlier occurrence of a shock wave on the upper surface of the elastic airfoil, which causes earlier appearances of transonic dip and S-shape flutter boundary. Moreover, the S-shape flutter boundary is widened as a consequence of the interference. Remarkably, the part of the S-shape flutter boundary is solely induced by the first-order mode instability, which is different from the typical alternating instability of the first-order and second-order modes together. When the rigid airfoil is positioned diagonally above the elastic airfoil, aerodynamic interference causes a later occurrence of a shock wave on the upper surface of the elastic airfoil, which leads to later appearances of the transonic dip and S-shape flutter boundary. Additionally, the S-shape flutter boundary is widened.