Nonoperative management of posterior shoulder instability is common. However, limited data are available to assess the pathomorphologic factors associated with its failure. The purpose of this study was 2-fold: (1) to determine glenohumeral pathomorphologic features predictive of nonoperative management failure of posterior instability; and (2) to determine the relationship between nonoperative management failure and posterior glenoid bone loss (pGBL) progression. It was hypothesized that greater posterior acromial height (PAH) would adversely affect nonoperative survivorship and that shoulders treated nonoperatively would have pGBL progression compared with those undergoing surgical stabilization. Case-control study; Level of evidence, 3. This was a retrospective review of a consecutive series of patients with isolated posterior shoulder instability, defined as isolated posterior labral tear on magnetic resonance imaging (MRI) with corresponding physical examination findings, who underwent nonoperative management for 6 months and had no previous related surgical history. The primary outcome of interest was the failure of nonoperative management, defined as the inability to return to full military duty or requiring surgical intervention. The morphologic features assessed for association with nonoperative management failure included pGBL, glenoid version, acromial morphology, and posterior humeral head subluxation. We secondarily sought to determine the progression of pGBL on serial MRI scans. Cox proportional hazard analysis was used to evaluate risk factors for failure. In this study, 42 of 90 (46.7%) patients had failed nonoperative management and went on to receive an arthroscopic stabilization procedure. The group with failed treatment demonstrated a greater humeral head subluxation ratio than those with successful nonoperative management (0.65 ± 0.2 vs 0.62 ± 0.2; P = .038). Cox proportional hazard analysis identified pGBL, greater PAH, less posterior acromial coverage, and posterior humeral subluxation as significant risk factors for failure. Of those with failed nonoperative management, 17 had repeat MRI scans at a mean of 488.2 ± 87 days after index MRI for comparison, demonstrating a statistically significant progression of pGBL (index MRI, 2.68% ± 1.71%) versus after nonoperative treatment failure (6.54% ± 1.59%; P = .003). Failure occurred 47% of the time in patients who underwent nonoperative management for isolated posterior glenohumeral instability for a minimum of 6 months, and it was associated with a greater posterior humeral head subluxation, less posterior acromial coverage, greater PAH, and greater amounts of glenoid retroversion on index MRI. Additionally, those who had repeat MRI approximately 1 year after the index MRI demonstrated greater pGBL compared with the index MRI.