Paralabral cysts in the shoulder are a relatively rare pathology. It is sometimes difficult to detect the location of a paralabral cyst in the shoulder using arthroscopy, and it can be difficult to confirm sufficient decompression by arthroscopy. We describe the case of a 64-year-old woman who underwent arthroscopic decompression for a paralabral cyst in the shoulder. Indigo carmine was injected into the cyst under ultrasonography guidance just before the operation. The leakage point of indigo carmine was detected using arthroscopy. Arthroscopic decompression was performed until the indigo carmine was completely discharged. Her shoulder pain, limited range of motion, and muscle weakness during abduction and external rotation improved postoperatively. Magnetic resonance imaging confirmed the disappearance of the cyst. Arthroscopic decompression using an ultrasonography-guided injection of indigo carmine is a useful treatment for a paralabral cyst in the shoulder.