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Quadrilateral space syndrome (QSS) is an uncommon cause of posterior shoulder pain and deltoid weakness, most often related to axillary nerve compression. We report a young adult male who presented with persistent pain and weakness of the right shoulder following trauma. Examination revealed deltoid atrophy and loss of abduction strength. MRI demonstrated a large inferior paralabral cyst compressing the quadrilateral space, while electromyography confirmed axillary nerve involvement. Initial management with arthroscopic labral repair and cyst decompression provided partial relief; however, persistent neurological deficit required secondary open quadrilateral space decompression. The patient achieved complete recovery of range of motion and deltoid strength, with no cyst recurrence at the 2.5-year follow-up. This case underscores the importance of considering QSS in patients with unexplained posterior shoulder pain and weakness, highlights paralabral cysts as a rare but treatable cause, and demonstrates the value of staged management and long-term follow-up in preventing chronic axillary neuropathy.