Dissipative-drift wave instability has been studied in the presence of impurity radiation. A two-fluid model is employed to derive the relevant equations. A general local dispersion relation is derived. The latter is analysed analytically as well as numerically. It is found that drift waves are further destabilized in the presence of impurity radiation loss. Nonthermal fluctuations are shown to cause both cross-field particle and electron energy transport. The results are relevant to tokamak edge plasma turbulence.