James Jones started in his place.
Wade suffered the injury Monday when he bumped knees with the Mavericks' Jason Kidd during the fourth quarter of Dallas' 98-96 win. He was able to practice on Wednesday in Miami but the knee swelled up on the five-hour flight to Phoenix Wednesday night.
He'd hoped treatment during the day would loosen the knee up but he was put on the inactive list an hour before the game.
Wade dismissed the notion that he might sit out Thursday's game to make sure he was ready for Saturday's Christmas showdown with the Los Angeles Lakers on ABC.
"It has nothing to do with Saturday," Wade said. "It is all about winning."
Wade averaged 27.7 points over the last 10 games since recovering from a wrist injury that slowed him down last month.
Brian Windhorst covers the Miami Heat for ESPN.com