This study presents the linear theory of thermohaline-shear instability, which is realized in oceanic flows that are dynamically and diffusively stable. The framework is based on the unbounded Couette model, which makes it possible to decouple the destabilizing effects of spatially uniform shear from instabilities caused by the presence of inflection points in velocity profiles. The basic state is assumed to be time dependent, which reflects the role of internal waves in controlling fine-scale shear. Linear stability analysis suggests that conditions for thermohaline-shear instability are met in most ocean regions where temperature and salinity concurrently increase downward. We conclude that thermohaline-shear instability represents a plausible mechanism for the initiation of active diffusive convection, which, in turn, is essential for the formation of thermohaline staircases and maintenance of double-diffusive interleaving. Plain Language Summary Warming and decline in sea ice coverage of the Arctic Ocean represent an unambiguous indicator of the ongoing climate change. A critical process in the transition of the Arctic to the new state involves heating of near-surface waters from below. Relatively warm waters enter the Arctic from the Atlantic Ocean and spread throughout the basin at depths of 150-900 m. These waters contain more than enough heat to melt all the sea ice, but it is not clear how this heat can be transferred upward to the surface. In particular, above the warm Atlantic Water lies a region marked by the presence of horizontal layers of 1-10 m thick with almost uniform temperatures in each layer. Stacks of these layers are often called "staircases," in a neat reference to step-like changes of temperature. Staircases act as a heat transport bottleneck in the upper Arctic, which demands full understanding of their physics for the purpose of climate prediction. This study explains their origin by showing that smooth temperature patterns are inherently unstable for the conditions commonly realized in the upper Arctic. Thus, even if nature initially creates a smooth temperature distribution, such stratification can spontaneously buckle due to its instability and form a staircase.