Posterior shoulder instability is a pathology that is increasingly seen in athletes. Excessive capsular laxity was originally proposed as the key component. Recent cadaveric and arthroscopic work has identified the importance of glenolabral integrity and glenoid depth in maintaining glenohumeral stability. Arthroscopic techniques to treat posterior instability are emerging. Until recently, reports of arthroscopic reconstruction focused entirely on capsular glenohumeral stability by altering two separate mechanisms: deepening of the glenoid concavity and reducing the capsular joint volume. This is accomplished by shifting the capsule to buttress the glenoid labrum. Thus increasing capsular tension increases the resultant compressive force vector into a deepened glenolabral concavity that, when combined together, enhances glenohumeral stability. In clinical and laboratory settings, we have shown that posteroinferior shoulder instability is associated with both capsular laxity and well-defined pathological lesions of the glenolabral concavity. Our results indicate that arthroscopic posterior capsulolabral repair and augmentation is a useful tool to restore the depth of the glenolabral concavity and to reduce the redundant posteroinferior capsule. This technique is effective in treating posteroinferior instability.