A study on the control of free vibration and stability characteristics of rotating hollow circular shafts subjected to compressive axial forces is presented in this paper. Both passive structural tailoring technique and active control scheme via collocated piezoelectric sensing and actuation are used in the study Gyroscopic and centrifugal forces combined with the compressive axial force contribute to the occurrence of divergence and flutter instabilities of the rotating shaft. The dual methodology based on the passive and active control schemes shows a high degree of efficiency toward postponement of these instabilities and expansion of the domain of stability of the system. The structural model of the shaft is based on an advanced thin-walled beam structure that includes the non-classical effects of transverse shear, anisotropy of constituent materials and rotatory inertia.