Abstract The propagation of finite amplitude ultra-low-frequency shear dust Alfven (SDA) waves, and their modulational instability in a magnetized plasma medium of positive and negatively charged dust fluids have been theoretically investigated by using the reductive perturbation method. The derivative nonlinear Schrodinger equation is derived to examine the stability analysis of such SDA waves. It is found that the SDA waves propagating in such an opposite polarity dust plasma medium are modulationally unstable, and that the instability criterion and the growth rate of these unstable SDA waves in such a novel opposite polarity dust plasma medium are found to be significantly different from those in electron–ion or electron–positron plasma media. The implications of the present investigation in different space environments and laboratory devices are briefly discussed.