Observations of a performance limiting feedback phase instability inthe HBT-EP tokamak are reported. The phase instability consists of a rapid growth of the phase difference between an m/n = 2/1 tearing mode and anexternal resonant magnetic perturbation. Observations of mode angular dynamicsduring phase instability test discharges show good agreement with theoreticalestimates of the phase instability timescale. The phase instability limitsfeedback performance in HBT-EP by decreasing the feedback loop's phaseaccuracy as gain increases.