The interfacial stability of an active viscous film is analyzed theoretically. The film, which rests on a flat substrate and is bounded from above by an air-liquid interface, contains a suspension of active particles such as swimming microorganisms that self-propel, diffuse, and exert active strecsPs on the suspending Newtonian medium. Using a continuum model for the configuration of the suspension coupled to the forced Stokes equations for the fluid motion, we analyze the growth of linearized normal mode fluctuations with respect to the quiescent base state. In the absence of gravity, puller suspensions are found to be always stable, whereas films containing pushers can become unstable above a critical activity level where active stresses overcome the damping effects of viscosity and surface tension and drive interfacial deformations. Confinement, diffusion and capillary forces all act to stabilize the system, and we characterize the transition to instability in terms of the dimensionless parameters of the problem. We also address the case of inverted films subject to the Rayleigh-Taylor instability, where we demonstrate that active stresses generated by pullers have the ability to stabilize gravitationally unstable films by counteracting the effect of the gravitational body force.