Abstract Acceleration can change the ionization of X-ray irradiated gas to the point that the gas becomes thermally unstable. Cloud formation, the expected outcome of thermal instability (TI), will be suppressed in a dynamic flow, however, due to the stretching of fluid elements that accompanies acceleration. It is therefore unlikely that cloud formation occurs during the launching phase of a supersonic outflow. In this paper, we show that the most favorable conditions for dynamical TI in highly supersonic outflows are found at radii beyond the acceleration zone, where the growth rate of entropy modes is set by the linear theory rate for a static plasma. This finding implies that even mildly relativistic outflows can become clumpy, and we explicitly demonstrate this using hydrodynamical simulations of ultrafast outflows. We describe how the continuity and heat equations can be used to appreciate another impediment (beside mode disruption due to the stretching) to making an outflow clumpy: background flow conditions may not allow the plasma to enter a TI zone in the first place. The continuity equation reveals that both impediments are in fact tightly coupled, yet one is easy to overcome. Namely, time variability in the radiation field is found to be a robust means of placing gas in a TI zone. We further show how the ratio of the dynamical and thermal timescales enters linear theory; the heat equation reveals how this ratio depends on the two processes that tend to remove gas from a TI zone: adiabatic cooling and heat advection.