Rarefaction effects in mixing layers become important in a number of situations, such as micromixer, exhaust plumes eminating from satellite thrusters and slip-stream immediately following a Mach stem. The present work studies the effect of Knudsen number and convective Mach number on the development of 2D compressible mixing layers. On analyzing the development of fluctuating kinetic energy and shear stress distribution, it was found that on increasing Knudsen number, the flow transitions from unstable regime to a stable regime, and further increase leads to the breakdown in continuum hypothesis. The Reynolds number at which this transitions from an unstable to stable regime happens depends on the convective Mach number for large convective Mach number, and is found to be independent of convective Mach number at small values of convective Mach number. It was seen that the Knudsen number at which breakdown in continuum hypothesis occured depended on the convective Mach number. Based on an order of magnitude analysis of the Grad-13 moment equation, the deviation of the shear stress from the Navier-Stokes equation was found to scale with the product of Knudsen number and convective Mach number.