Within the framework of shallow-water magnetohydrodynamics, we investigate the linear instability of horizontal shear flows, influenced by an aligned magnetic field and stratification. Various classical instability results, such as Høiland’s growth-rate bound and Howard’s semi-circle theorem, are extended to this shallow-water system for quite general flow and field profiles. In the limit of long-wavelength disturbances, a generalisation of the asymptotic analysis of Drazin & Howard (J. Fluid Mech., vol. 14, 1962, pp. 257–283) is performed, establishing that flows can be distinguished as either shear layers or jets. These possess contrasting instabilities, which are shown to be analogous to those of certain piecewise-constant velocity profiles (the vortex sheet and the rectangular jet). In both cases it is found that the magnetic field and stratification (as measured by the Froude number) are generally each stabilising, but weak instabilities can be found at arbitrarily large Froude number. With this distinction between shear layers and jets in mind, the results are extended numerically to finite wavenumber for two particular flows: the hyperbolic-tangent shear layer and the Bickley jet. For the shear layer, the instability mechanism is interpreted in terms of counter-propagating Rossby waves, thereby allowing an explication of the stabilising effects of the magnetic field and stratification. For the jet, the competition between even and odd modes is discussed, together with the existence at large Froude number of multiple modes of instability.