Abstract: To further investigate the features of modified nodal expansion method (MNEM) for solving the convection-diffusion equation, the stability and error analysis were carried out. Based on sign preservation principle, the stability analysis reveals that the MNEM has inherent stability. The error analysis was implemented through a series of numerical experiments, and the results show that the MNEM is 3rd order scheme for one dimensional problem, while as 2nd order scheme for multi-dimensional problem because of using simple transverse leakage approximation.