Wade worked out on the Bradley Center court for 20 minutes with the Heat's assistant coaches before the start of Game 4 against the Bucks, but was later ruled out.
Veteran swingman Mike Miller was in the starting lineup at shooting guard in Wade's absence.
Wade sat out of most of the Heat's practice on Saturday at Marquette University, and coach Erik Spoelstra said the veteran guard's status wouldn't be determined until just before Sunday afternoon's game.
Wade has been dealing with multiple bruises in his knee for more than a month, and had missed eight of 10 games at one point late in the regular season to treat the injury. He has played in all three games of the series against the Bucks, but is coming off the worst playoff shooting effort of the season in Tuesday's 104-91 victory in Game 3.
Wade missed 11 of his 12 shots from the field and committed six turnovers. But the uneven performance also saw Wade finish with 11 assists, nine rebounds, five steals and two blocks in 36 minutes. Wade also missed a significant stretch of the second half after he bruised his right arm.
Wade has averaged 13.7 points, seven rebounds and 6.3 assists while shooting just 36.8 percent from the field in the series against Milwaukee. But the Heat have gotten strong support from the bench, with reserve guard Ray Allen scoring at least 20 points in two of the three games. Miami has beaten Milwaukee by an average of 19.3 points.
With the defending champions holding a commanding lead in the series, James said Wade should focus on getting as healthy as possible now to be ready for a long playoff run.
"He has to do what's best for him and then what's best for the team," James said. "He's a competitor, and he wants to be out there. But you don't put injuries in front of anything. If you're hurting, and you're not capable of doing the things you need to do to help the team, then you shouldn't risk it."