The suspension of liquid drops provides a preferable boundary condition for investigating various free surface phenomena. Here we report the observation of concentric capillary wave formed on the surface of drastically flattened water drops levitated in ultrasound. The measured wavelength of capillary wave accords well with that from the classic dispersion relation equation. The eighth mode sectorial oscillation of acoustically levitated drop is excited by the active modulation of sound pressure. It is found that these phenomena are due to parametric excitation. The capillary wave is induced when the parametric instability arises and ultrasound pressure exceeds a threshold pressure. The sectorial oscillations take place when the equatorial radius varies at twice the natural sectorial frequency of the levitated drop. The frequency of the eighth mode sectorial oscillation decreases with the increase of equatorial radius and can be well described by modifying the Rayleigh equation. Further analysis reveals the parametric excitation mechanism for this kind of oscillations.