Peroneal tendon instability and subluxation often are overlooked disorders of lateral ankle pain after ankle trauma. Masked by the clinical symptoms of an ankle sprain, the diagnosis often is made with a delay of several weeks. In addition, peroneal tendon instability often is overlooked on MRI. Dynamic ultrasound is extremely useful in identifying the pathology. When left untreated, peroneal tendon instability can lead to persistent lateral ankle pain and substantial functional problems. Peroneal tendon instability is not only a problem in athletes but in all active persons. Only acute rupture of the superior peroneal retinaculum with spontaneous repositioning of the peroneal tendons has a fair chance for nonoperative management with a walker or cast immobilization. Operative treatment usually is required with primary repair and reinforcement of the superior peroneal retinaculum. If the retromalleolar groove is shallow, an additional groove-deepening procedure is indicated. It is critical that all concomitant injuries (mainly partial longitudinal tears) are treated at the time of surgery. So far, treatment guidelines for peroneal tendon disorders are based only on case series and expert opinion. Further investigation is needed to establish evidence-based treatment protocols for this rare but important injury. The goals of this review article are to illustrate the anatomy and biomechanics of peroneal tendon instability and to present current treatment options, as well as, the authors’ preferred surgical technique.