Protoplanetary disks are observed to undergo episodes of powerful eruptions known as FUor- and EXor-type outbursts. Thermal instability has been proposed as one of the underlying mechanisms behind this outburst activity, which can produce self-regulating accretion events. This instability sets in at high temperatures, above 5000 K, because of steep opacity dependence on temperature caused by ionization of hydrogen. In this presentation I will talk about our latest findings related to new aspects of the thermal instability. With the help of global protoplanetary disk simulations, we show that “generalized” thermal instabilities can set in at temperatures as low as 1500 K. The molecular line absorption, primarily from water vapor, results in regions where the opacity is strongly increasing with temperature. This mechanism can cause formation of locally unstable regions, and as these lower temperatures are readily achieved in the inner parts of the disk, encounters of such unstable regions with magnetospheric boundary may be responsible for some of the short duration (EXor) outbursts. The water content in the protoplanetary disks may thus significantly influence the eruptive phase of the young stars.