Although the LDO is stable without an input capacitor, good analog design practice is to connect a capacitor from IN to GND. Make sure this capacitor has a value at least equal to the nominal value specified in the Recommended Operating Conditions table. The input capacitor counteracts reactive input sources and improves transient response, input ripple, and PSRR. Use this capacitor if the source impedance is greater than 0.5Ω. When the source resistance and inductance are sufficiently high, especially in the presence of load transients, the overall system is susceptible to instability. Instability includes ringing, sustained oscillation, and other performance degradation if there is insufficient capacitance between IN and GND. Use a capacitor with a value greater than the minimum if large, fast-rise-time load or line transients are anticipated. Also use this capacitor if the device is located more than a few centimeters from the input power source.

An output capacitor of an appropriate value helps provide stability and improve dynamic performance. Use an output capacitor within the range specified in the Recommended Operating Conditions table. For fastest settling time, keep the derated output capacitance in the 0.75μF to 1.5μF range. Minimize any inductance (including capacitor ESL) between OUT and the output capacitance to less than 2.5μH avoid degrading settling performance.