The influence of graded suspended sediment transport on the formation of tidal sand waves is investigated. Hereto, in the framework of a linear stability analysis, we examine the time development of small-amplitude perturbations superimposed to a flat heterogeneous seabed in a shallow tidal sea dominated by one tidal constituent. The heterogeneous bottom material is modeled by a bimodal sediment mixture and the transport of sediment close to the bottom, as well as in suspension, is considered. The active layer concept is employed and hiding/exposure effects are taken into account. The mechanisms giving rise to the sediment-sorting process along the bed forms are found to be unaffected by the fractional transport of sediment in suspension. On the other hand, the formation of sand waves is quantitatively, substantially affected by the graded suspended sediment transport and the wavelength of the most amplified mode is found to depend strongly on the characteristics of the sediment mixture. In particular, the graded suspended sediment transport largely affects the contribution to the amplification rate related to the sorting process. This leads to the growth of bed forms characterized by a smaller wavelength compared with that predicted for a uniform sediment, when the mean grain size of the sediment mixture is relatively coarse. On the other hand, longer bed forms appear when the sediment mixture is characterized by a relatively fine mean grain size. Moreover, a destabilizing effect is identified in the former case while the flat bed configuration is stabilized in the latter case. A comparison of the theoretical predictions with field observations seems to support the model, even though it cannot be considered conclusive.