The plastic instability mechanism in tensile metal specimens, which influences mechanical properties of structural members, is presented. A material instability criterion for a finite deformation problem and a structural instability (bifurcation) criterion, which is identical with Hill's criterion, are formulated. The present criteria are examined on two-dimensional and three-dimensional plastic instability analyses. It has been proved that occurrence of a peak point and necking are due to material and structural instability, respectively.