"It's likely there's going to be a surgical procedure," coach Jeff Bower told the team's website (www.nba.com/hornets).
"We're in the process of gathering information as far as the next steps in dealing with Chris's knee. He has been evaluated and MRI (scans) have been conducted (on Sunday) by our doctors."
Paul first hurt his knee last week in a game at Golden State. He hit the knee again racing out of bounds to save the ball on Friday against the Chicago Bulls.
Bower said a decision on the 24-year-old was likely to be made in the next day or two.
He was not able to put a timetable on a return to action in the event of surgery but local media reported Paul would miss at least a month.
Paul is averaging 20.4 points and 11.2 assists this season for the Hornets, who are 26-21 and hold the eighth and last Western Conference berth for the postseason.
(Writing by Larry Fine, editing by Tony Jimenez. To query or comment on this story email firstname.lastname@example.org)