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Regional anesthesia has an established role in providing perioperative analgesia for shoulder surgery. However, phrenic nerve palsy is a significant complication that potentially limits the use of regional anesthesia, particularly in high-risk patients. The authors describe the anatomical, physiologic, and clinical principles relevant to phrenic nerve palsy in this context. They also present a comprehensive review of the strategies for reducing phrenic nerve palsy and its clinical impact while ensuring adequate analgesia for shoulder surgery. The most important of these include limiting local anesthetic dose and injection volume and performing the injection further away from the C5–C6 nerve roots. Targeting peripheral nerves supplying the shoulder, such as the suprascapular and axillary nerves, may be an effective alternative to brachial plexus blockade in selected patients. The optimal regional anesthetic approach in shoulder surgery should be tailored to individual patients based on comorbidities, type of surgery, and the principles described in this article.