The dynamic behavior of a flexible shaft with a disk subjected to axial forces has been studied by employing the transfer matrix approach. The conventional transfer matrix was modified to include the applied axial force, and then integrated into a computer program to investigate the effect of the load force on the stability and the natural frequencies of overhung rotor systems. Two overhung rotor systems are considered. One is the cantilevered rotor and the other is the overhung rotor with an intermediate support. The gyroscopic effect of the rotor strongly influences the dynamic behavior of the shaft-disk system under axial forces not only by increasing the critical force for the stability but also by changing the instability type from divergence to flutter.