<p>This paper concerns the Euler-Poisson system in an annulus with finite radius. The dynamical stability of radially symmetric transonic shock solutions to the Euler-Poisson system is transformed into the global well-posedness of a free boundary problem for a second-order quasilinear hyperbolic equation. One of the crucial ingredients of the analysis is to establish an energy estimate for the associated initial boundary value problem. The steady radial transonic shock solutions are proved to be dynamically and exponentially stable with respect to small perturbations of the initial data.</p>