Axillary nerve injury remains the most common peripheral nerve injury to affect the shoulder. It most often is seen after glenohumeral joint dislocation, proximal humerus fracture, or a direct blow to the deltoid muscle. Compression neuropathy has been reported to occur in the quadrilateral space syndrome, although the true pathophysiology of this disorder remains unclear. The axillary nerve is vulnerable during any operative procedure involving the inferior aspect of the shoulder and iatrogenic injury remains a serious complication of shoulder surgery. During the acute phase of injury, the shoulder should be rested, and when clinically indicated, a patient should undergo an extensive rehabilitation program emphasizing range of motion and strengthening of the shoulder girdle muscles. If no axillary nerve recovery is observed by 3 to 6 months after injury, surgical exploration may be indicated, especially if the mechanism of injury is consistent with nerve rupture. Patients who sustain injury to the axillary nerve have a variable prognosis for nerve recovery although return of function of the involved shoulder typically is good to excellent, depending on associated ligamentous or bony injury.