We investigated the aerodynamic interference between the prop-rotor and the tail-wing, and its effect on the lateral stability of a tiltrotor UAV configuration during transient flight modes. Unsteady flow calculations were conducted using an unstructured mesh flow solver, coupled with an overset mesh technique. It was shown that as the sideslip angle increases, the interference between the prop-rotor and the tail-wing is enlarged. This interference magnifies the fluctuating amplitudes of the yaw and roll moments. The increased sideslip angle also induces an imbalance of the thrust force generated by the right and left prop-rotors, affecting the lateral stability. The effect of the nacelle tilt angle on the lateral stability was also investigated for the nacelle tilt angles of 80A degrees and 90A degrees. When the nacelle tilt angle was 90A degrees, the interference between the prop-rotor and the tail-wing was reduced.