Posteromedial retraction of the tympanic membrane, between the oval window superiorly and the round window niche inferiorly, results in the formation of an epitheliumlined pocket within the sinus tympanic recess. Failure to recognize posterior invagination of the tympanic membrane intraoperatively leads to inadvertent tearing of the tympanomeatal flap at the level of the annulus with epithelial seeding of the middle ear and probably cholesteatoma recurrence. This article focuses on the clinical manifestations and radiographic findings suggestive of sinus tympanic epithelial retraction of the pars tensa and provides direct correlation between human cross-sectional temporal bone anatomy and otomicroscopy. The surgical management of these challenging lesions includes initial endaural access, external meatal bone removal posteromedial to the tympanic annulus and anterior to the vertical portion of the facial nerve, and middle ear ventilation after marsupialization of the epithelial retraction. Although early tympanic membrane retraction can be treated with a ventilation tube, deep epithelial pockets may require additional surgical treatment. A method for the management of sinus tympanic cholesteatomas is demonstrated.