We investigate the three-dimensional instability of finite-amplitude standing surface waves under the influence of gravity. The analysis employs the transition matrix (TM) approach and uses a new high-order spectral element (HOSE) method for computation of the nonlinear wave dynamics. HOSE is an extension of the original high-order spectral method (HOS) wherein nonlinear wave–wave and wave–body interactions are retained up to high order in wave steepness. Instead of global basis functions in HOS, however, HOSE employs spectral elements to allow for complex free-surface geometries and surface-piercing bodies. Exponential convergence of HOS with respect to the total number of spectral modes (for a fixed number of elements) and interaction order is retained in HOSE. In this study, we use TM-HOSE to obtain the stability of general three-dimensional perturbations (on a two-dimensional surface) on two classes of standing waves: plane standing waves in a rectangular tank; and radial/azimuthal standing waves in a circular basin. For plane standing waves, we confirm the known result of two-dimensional side-bandlike instability. In addition, we find a novel three-dimensional instability for base flow of any amplitude. The dominant component of the unstable disturbance is an oblique (standing) wave oriented at an arbitrary angle whose frequency is close to the (nonlinear) frequency of the original standing wave. This finding is confirmed by direct long-time simulations using HOSE which show that the nonlinear evolution leads to classical Fermi–Pasta–Ulam recurrence. For the circular basin, we find that, beyond a threshold wave steepness, a standing wave (of nonlinear frequency $\Omega$) is unstable to three-dimensional perturbations. The unstable perturbation contains two dominant (standing-wave) components, the sum of whose frequencies is close to $2\Omega$. From the cases we consider, the critical wave steepness is found to generally decrease/increase with increasing radial/azimuthal mode number of the base standing wave. Finally, we show that the instability we find for both two- and three-dimensional standing waves is a result of third-order (quartet) resonance.