Unstable waves have been long studied in fluid shear layers. These waves affect transport in the atmosphere and oceans, in addition to slipstream stability behind ships, aeroplanes and heat-transfer devices. Corresponding instabilities in granular flows have not been previously documented, despite the importance of these flows in geophysical and industrial systems. Here we report that breaking waves can form at the interface between two streams of identical grains flowing on an inclined plane downstream of a splitter plate. Changes in either the shear rate or the angle of incline cause such waves to appear abruptly. We analyse a granular flow model that agrees qualitatively with our experimental data; the model suggests that the waves result from competition between shear and extensional strains in the flowing granular bed. We propose a dimensionless shear number that governs the transition between steady and wavy flows.