The transverse vibrations and stability of an axially moving sandwich beam are studied in this investigation. The face layers are assumed to be in the membrane state, which bears only axial loading but no bending. Only shear deformation is considered for the soft core layer. The governing partial equation is derived using Newton's second law and then transferred into a dimensionless form. The Galerkin method and the complex mode method are employed to study the natural frequencies. In comparison with the classical homogenous axially moving beam, the gyroscopic matrix is no longer skew-symmetric because of the introduction of the soft core. The critical speed for the divergence of the axially moving sandwich beam is analytically obtained. The contribution of the core layer shear modulus to the natural frequencies and critical speed is discussed.