The main purpose of this paper is to study the impact of breaker failure on system stability of electric power transmission system. Power system operation should take into consideration the situation with breaker failure to prevent system from becoming unstable. Breaker failure protection is employed as an important backup protection scheme to detect a circuit breaker failure. In applying breaker failure protection for sequential tripping, it is required to provide maximum system isolation as well as to maintain necessary flexibility. The protection scheme should be adapted to various line and bus arrangements and all possible operation conditions for possible impact on system stability. System stability is also a safety factor in performance evaluation. Study results indicate that the impact of breaker failure on system stability should not be overlooked and the breaker failure protection plays an important role for the system security.