Two-dimensional (2D) magneto-hydrodynamic (MHD) liner-on-plasma computations have been performed to study the growth of instabilities in a magnetized target fusion system involving the cylindrical compression of an inverse Z-pinch target plasma by a metallic liner. The growth of modes in the plasma can be divided into two phases. During the first phase, the plasma continues to be Kadomtsev stable. The dominant mode in the liner instability is imposed upon the plasma in the form of a growing perturbation. This mode further transfers part of its energy to its harmonics. During the second phase, however, non-uniform implosion of the liner leads to axial variations in plasma quantities near the liner–plasma interface, such that certain regions of the plasma locally violate the Kadomtsev criteria. Further growth ofthe plasma modes is then due to plasma instability. The above numerical study has been complemented with a linear stability analysis for the plasma, the boundary conditions for this analysis being obtained from the liner-on-plasma simulation. The stability of axisymmetric modes in the first phase is found to satisfy the Kadomtsev condition Q0<1. Furthermore, the growth rates of these modes in the second phase are found to agree well with the predictions of the linear stability analysis. A linear stability analysis for m>1 modes, using equilibrium profiles from the 2D MHD study, shows that their growth rates can exceed those for m=0 by as much as an order of magnitude.