Background: Treatment of acetabular labral tears with moderate or severe intrasubstance damage or segmental defects remains a substantial challenge. Circumferential labral reconstruction with iliotibial band allograft is a relatively new technique that has been proposed to restore stability and eliminate high-stress junction points. Purpose: To compare outcomes between hips treated with primary allograft circumferential labral reconstruction and primary labral repair. Study Design: Cohort study; Level of evidence, 3. Methods: All consecutive hips between 2014 and 2015 that underwent primary reconstruction or primary repair by the senior surgeon were included and compared. Hips that had a prior intra-articular procedure were excluded. Patient-reported outcome (PRO) scores and visual analog scales were completed by patients within 1 week before surgery and between 22 and 26 months postoperatively. PROs included the modified Harris Hip Score, the International Hip Outcome Tool, and the 12-Item Short Form Health Survey for physical health. Pain and satisfaction were assessed with visual analog scales. Crude and inverse probability of treatment weighting comparisons of PROs between groups were performed. Results: A total of 162 hips met the inclusion criteria for this study, including 99 labral repairs and 63 complete labral reconstructions. Patients who underwent labral reconstruction were, on average, older (43.4 vs 29.5 years; P < .01), had a slightly higher body mass index (24.6 vs 23.0; P < .01), had hips with a higher Tönnis grade (grade 1 or 2: 25% vs 9%; P < .01), had higher preoperative pain scores (49.9 vs 41.5; P = .01), and had hips with more severe pathology (68% vs 5%; P < .01) as compared with patients with labral repair hips. Five (5%) labral repair hips and 5 (8%) labral reconstruction hips failed treatment (P = .48). Among hips that did not fail (n = 94 repairs, n = 58 reconstructions), all demonstrated statistically significant improvements in PROs, and there was no statistical difference in PROs between groups after weighting (P > .05). Conclusion: Primary circumferential labral reconstruction is a viable treatment option with promising short-term outcomes for hips that demonstrate moderate or severe labral damage. Despite less favorable preoperative characteristics, labral reconstruction offers similar outcomes when compared with labral repair in hips with less severe pathology.