Spatial instability of a thin moving plane liquid sheet is analyzed. It is shown that there exist two independent modes of instability, sinuous and varicose. For the sinuous mode, there is a critical Weber number of unity below which pseudo-absolute instability exists and above which convective instability appears. For the varicose mode, the instability is always convective. The convective mode is induced by the aerodynamic effects, and is related to the corresponding temporal instability through Gaster's relation at the sufficiently high liquid velocity. Perturbation analysis indicates that the spatial amplification rate depends strongly on the gas-to-liquid density ratio ϱ. For the convective instability of the sinuous mode, there exists a critical Weber number of slightly larger than unity, below which liquid viscosity exhibits both stabilizing and destabilizing effects and above which the viscous effects always reduce the growth rate and the dominant wavenumber. For situations where the Weber number, We ⪢ 1, but ϱ We ⩽ 0(1), the growth rate of the sinuous mode is larger than that of the varicose mode under the same flow conditions. If both We ⪢ 1 and ϱ We ⪢ 1, the spatial growth rate of both sinuous and varicose modes is almost the same, except at the small wavenumbers where the sinuous mode has slightly larger growth rate than the corresponding varicose mode. The viscous effects on the varicose mode is always stabilizing. The present results compare favorably with the existing experimental observations.