Measurement-integrated (MI) simulation is a numerical flow analysis method with a feedback mechanism from measurement of a real flow. It correctly reproduces a real flow under inherent ambiguity in a mathematical model or a computational condition. In this paper we theoretically investigated the destabilization phenomenon of MI simulation, in which analysis error suddenly increases at some critical feedback gain. This phenomenon has been considered as instability of a closed-loop feedback system, but present study treated it as that of a numerical scheme. First, the mechanism of the destabilization phenomenon was investigated based on the sufficient condition of the convergence of iterative calculation of existing MI simulation. It was found that the feedback signal in the source term destabilized the iterative calculation. The validity of the present theoretical analysis was verified for examples treated in former studies of MI simulations. Occurrences of destabilization phenomenon in all the examples were well explained by the condition of this study, especially for cases of relatively small time steps and large feedback gains.