In this paper, a nonlocal elasticity formulation is presented for analyzing the instability of nano-peapods by modeling the nanotube as a shell. Using the nonlocal elasticity theory, the small scale characteristics of Carbon Nano-Peapods (CNPs) are taken into account. While the classical elastic shell model overestimates the critical pressure for the onset of structural instability of carbon nanotubes, the obtained results show that the nonlocal elastic shell model for nano-peapods can potentially provide better predictions. According to the results, it is concluded that the presence of C 60 inside (10,10) Carbon Nanotubes (CNTs) significantly increases the stability resistance of the single CNT.