Fatigue cracking of an aircraft engine labyrinth seal occurred during pre-flight factory testing. Testing in a static rig revealed that the seal could be aeroelastically excited by the labyrinth leakage air flow. An earlier analytical model used for stability analysis was extended to account for the effect of acoustic natural frequency on the aeroelastic stability. The new model predicted that the ratio of acoustic and mechanical natural frequencies was of vital importance in determining if the nature of the pressure fluctuations within the labyrinth seal teeth provided either positive or negative aerodynamic damping to the seal. The analytical results were verified by further rig testing and also by correlation with test results for several other seals tested as part of a labyrinth seal technology program. A mechanical friction damper sleeve was designed to suppress the aeroelastic instability. The damper sleeve was tested in a rotating rig to evaluate its damping characteristics. The aircraft engine was qualified with the newly designed damper which has demonstrated its effectiveness for eight years of service and half a million hours of operation without incident.