The diagnosis and surgical management of posterior shoulder instability remains a challenge to the practicing orthopedist. Rather than an “essential lesion,” pathology may include a patulous or redundant capsule, a torn or detached labrum or an insufficient rotator interval, all of which may contribute to a painful, dysfunctional shoulder. Symptomatic instability commonly occurs with the shoulder in the jeopardy position of flexion, adduction, and internal rotation. The most consistent physical findings include a positive load and shift test, a positive jerk test, and a significant sulcus sign. MR scans are useful in assessing posterior capsulolabral tissue whereas CT scans can identify the uncommon problems of glenoid hypoplasia and retroversion. Reports of open surgical treatment have documented widely varying success rates with the potential for significant morbidity and complications. Arthroscopic stabilization of posterior instability has been studied over the past 2 decades in an effort to improve surgical outcomes and to minimize the morbidity of surgical treatment. The most promising arthroscopic methods include capsulolabral augmentation, posterior Bankart repair, and rotator interval interval plication. Each of these techniques is described in detail.