Analysis of dynamic combustor stability is essential for the development of practical devices that employ distributed reaction zones. The fluctuation of reaction zone (RZ) was studied to compare normal air combustion and distributed combustion at an equivalence ratio of 0.9 in a swirl-stabilized burner using methane fuel. Distributed combustion was fostered by diluting the inlet air stream with carbon dioxide that resulted in a gradual drop in the adiabatic flame temperature (Tad). High-speed broadband chemiluminescence at 3 kHz was used to study the global combustion dynamics. Vortex shedding observed along the shear layers influenced the oscillation of flame base in normal air combustion. However, relatively stable bases were observed in distributed combustion. Fast Fourier Transformation performed on RZ base fluctuation data supported the observations from chemiluminescence signatures. Proper orthogonal decomposition (POD) analysis indicated various vortex-shedding patterns as the dominant structures in conventional swirl flames. The power spectral density (PSD) of POD modes showed the rotational effect of RZ and weak von Karman vortex shedding to influence fluctuation in distributed combustion. The self-sustained flame oscillations in normal swirl flames were investigated from the acoustic and heat release fluctuation signals. Both acoustic and heat release fluctuations gradually reduced when approaching the distributed combustion. The PSD of these signals demonstrated a common peak at ~ 174 Hz (in normal swirl flames) with possible thermo-acoustic coupling. This peak was consistent with the peaks obtained from the base fluctuation and POD spectra. The peak gradually diminished when approaching the state of distributed combustion. A similar observation of gradually decreasing acoustic and heat release fluctuation was made with a constant Tad. However, the drop in chemiluminescence signal intensity with CO2 dilution was relatively low in case of constant Tad compared to the variable Tad case. The local and global Rayleigh index obtained for the variable Tad cases at different dilution levels showed positive values at O2 = 21 and 20%, which signified self-sustained instability. However, the distributed combustion possessed a negative Rayleigh index indicating dampening of instability. These results support the gradual decline of thermo-acoustic instability when approaching the distributed combustion condition.