A posterior horn medial meniscus (PHMM) tear subjects the knee to pathological stresses, especially in the setting of a deficient anterior cruciate ligament (ACL). These PHMM tears have to be surgically addressed, however they remain a diagnostic challenge. Hence, this study aims to evaluate the wave sign as an arthroscopic diagnostic aid for the PHMM tear which may be occult. This is a retrospective study of 61 consecutive patients (62 ACL-deficient knees) who underwent arthroscopic primary ACL reconstruction between September 2017 and August 2018. We defined PHMM tears as tears located in the posterior one-third of the medial meniscus. Root tears and ramp lesions were included in our analysis. The arthroscopic findings were recorded after a comprehensive arthroscopic survey. In the sample of ACL-deficient knees, 44 (71.0%) had a concomitant medial meniscus tear. The most common location for the tear was in the posterior horn (81.8%). There were seven occult PHMM tears, not described by the radiologist or identified by the operating surgeon on the pre-operative magnetic resonance imaging. The wave sign was identified in 10 (16.1%) knees, all confirming the presence of the PHMM tear. A positive correlation was found between the presence of the wave sign and the PHMM tear. The wave sign has a statistically significant but weak positive correlation with the presence of the PHMM. We view the wave sign as a valuable arthroscopic cue to rule-in the presence of the PHMM tear in the ACL-deficient knee.