The influence of inertia and elasticity on the onset and stability of Taylor-vortex flow (TVF) is examined for an Oldroyd-B fluid. The Galerkin projection method is used to obtain the departure from Couette flow (CF). Only axisymmetric flow is examined. The solution is capable of capturing the dynamical behaviour observed experimentally for viscoelastic fluids in the inertio-elastic and purely elastic ranges. For flow with dominant inertia, the bifurcation picture is similar to that for a Newtonian fluid. However, transition from CF to TVF is oscillatory because of fluid elasticity. Steady TVF sets in, via supercritical bifurcation, as Re reaches a critical value, Rec. The critical Reynolds number decreases with fluid elasticity, and is strongly influenced by fluid retardation. As elasticity exceeds a critical level, a subcritical bifurcation emerges at Rec, similar to that predicted by the Landau–Ginzburg equation. It is found that slip along the axial direction tends to be generally destabilizing. The coherence of the formulation is established under steady and transient conditions through comparison with exact linear stability analysis, experimental measurements, and flow visualization. Good agreement is obtained between theory and the measurements of Muller et al. (1993) in the limit of purely elastic overstable TVF.