The instability and rupture of thin films due to a negative disjoining pressure is examined. A system of a thin film, bounded by a solid substrate and a second fluid phase semi-infinite in extent, is considered, and a nonlinear hydrodynamic stability analysis that takes into account the effects of the overlying fluid phase in a formal manner is presented. The analysis yields an evolution equation for the film thickness which reflects the effects of disjoining pressure and interfacial tension, as well as the dynamics of the two fluid phases. Limiting forms of the evolution equation are studied numerically to obtain qualitative features of the instability that cannot be captured by linear theory, and quantitative information about film rupture times.