Instabilities of fluid flows have traditionally been investigated by normal mode analysis, i.e. by linearizing the equations of flow and testing for unstable eigenvalues of the linearized problem. However, the results of eigenvalue analysis agree poorly in many cases with experiments, especially for shear flows. In this paper we study the instabilities of two-dimensional Couette flow of a polymeric fluid in the framework of non-modal stability theory rather than normal mode analysis. A power-law model is used to describe the polymeric liquid. We focus on the response to external excitations and initial conditions by examining the pseudospectra structures and the transient energy growths. For both Newtonian and non-Newtonian flows, the results show that there can be a rather large transient growth even though the linear operator of Couette flow has no unstable eigenvalue. The effects of non-Newtonian viscosity on the transient behaviors are examined in this study. The results show that the "shear-thinning/shear-thickening" effect increases/decreases the amplitude of responses to external excitations and initial conditions. (C) 2010 Elsevier B.V. All rights reserved.