This paper discusses the capillary instability of a cylindrical jet of a conducting liquid carrying an axial volume current with respect to axisymmetric disturbances. Growth rates obtained from the analysis are found to be in reasonable agreement with the experimental values of Dattner, Lehnert & Lundquist (1958). It turns out that a mode of maximum instability always exists for any value of the conductivity and the growth rate decreases with increase in conductivity. It is also found that, as in the non-magnetic case, the liquid column is unstable if the wavelength exceeds the circumference of the cylinder. Growth rates increase with increase in the current strength but for sufficiently small wavelengths, the surface tension completely overpowers the destabilizing influence of the current and stabilizes the liquid column. If in addition a longitudinal magnetic field is present, it is shown that it is possible to stabilize varicose deformations of all wavelengths if the magnetic field exceeds a critical value depending on the current strength.