Abstract This paper presents an aeroelastic analysis of carbon nanotube (CNT) reinforced functionally graded composite panels in supersonic airflow using a higher-order shear deformation theory. There are four types of CNT distributions considered in this investigation. Since the panel studied here is relatively thick, Reddy’s third-order shear deformation theory is applied to evaluate the displacement fields of the panel. Applying Hamilton’s principle, the equation of motion of the structural system is formulated. The CNT reinforced functionally graded composite panels investigated in this study are simply-supported on two opposite edges and therefore, in order to solve the coupling set of differential equations of motion, the state-space Levy method is applied. Based on the Levy solution, the aeroelastic properties of the CNT reinforced composite panels are analyzed using the frequency-domain method. The effects of CNT distributions and boundary conditions on the aeroelastic stabilities of the CNT reinforced functionally graded panels are researched. Different types of aeroelastic instability under different boundary conditions are observed. Moreover, vacuo and fluttering mode shapes of the CNT reinforced functionally graded panels are presented.