A finite element formulation with use of a two-noded shear flexible element with four degrees of freedom oer node is adopted to study the effects of shear deformation and rotary inertia on two-dimensional panel flutter. Exact integration is carried out for all the terms in the element matrix for both thick and thin configurations of the panel. The present study shows good agreement with the previous work for thin panels for all boundary conditions as a result of using the high precision finite element. Shear deformation and rotary inertia effects on the critical dynamic pressure, the effect of aerodynamic damping on the critical dynamic pressure, and the change in flutter mode shapes due to the increase in thickness value of the panel and its end conditions are presented in the form of graphs. © 1991.