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Chronic posterolateral rotatory instability of the knee was introduced as a diagnostic classification by Hughston and associates in the early 1970s and occurs as a result of dysfunctional healing of a strained arcuate complex, causing a patulous posterolateral capsuloligamentous complex to exist. This capsular redundancy allows varying degrees of recurvatum and adduction instability during single-limb stance. Eradication of the redundant pouch with a capsular shift-type reconstruction has been shown to eliminate the instability and hold up under long-term follow-up studies. Understanding the complex normal and injured anatomy of the posterolateral corner of the knee is essential for effective reconstruction of this instability.