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An approach to the enhancement of terahertz radiation from a grating waveguide by two-stream instability (TSI) is presented in this paper. The grating waveguide composed of a planar metallic grating and an opposite plate is driven by two electron beams with a velocity separation. The dispersion equation is derived with the linearized fluid theory and solved numerically. Also, the numerical results show that a considerable enhancement of growth rate is possible at an optimized velocity separation. With the help of 2-D particle-in-cell simulations, the improvement of radiation performance induced by the TSI is demonstrated.