Background: Capsular management during hip arthroscopy remains controversial. Studies evaluating this topic consist mostly of retrospective comparative reviews of prospectively gathered data on a large series of patients. Purpose/Hypothesis: The purpose was to perform a prospective randomized trial to comparatively assess 3 commonly performed capsular management techniques. It was hypothesized that capsular closure during hip arthroscopy would result in superior outcomes when compared with unclosed capsulotomy management techniques. Study Design: Randomized controlled trial; Level of evidence, 2. Methods: Patients (N = 150) who had hip arthroscopy with labral repairs and femoral osteoplasties performed by the senior author were randomly assigned into 3 groups at the time of their surgery: T-capsulotomy without closure (TC), interportal capsulotomy without closure (IC), and interportal capsulotomy with closure (CC). All patients underwent labral repair and femoral osteoplasty. Patient-reported outcomes were obtained preoperatively and at 3, 6, 12, and 24 months postoperatively. Other outcomes obtained included the need for future hip surgery. Results: Patient demographics, preoperative patient-reported outcomes, and radiographic measurements were similar among all 3 groups. Revision hip arthroscopy was performed in 5 TC cases, 2 IC cases, and 1 CC case (P = .17). Conversion to hip arthroplasty occurred in 4 patients in the TC group and none in the IC and CC groups (P = .02). The CC group showed higher modified Harris Hip Score (mHHS) and Hip Outcome Score–Activities of Daily Living (HOS-ADL) at the 2-year follow-up when compared with the IC group (P = .003 and P < .001, respectively). When compared with the TC group, the CC group demonstrated superior mHHS (86.2 vs 76), HOS-ADL (85.6 vs 76.8), and HOS-SSS (Hip Outcome Score–Sports-Specific Subscale; 74.4 vs 65.3) at the final 2-year follow-up (P < .001). At the 2-year follow-up, the IC group had a higher mHHS (81.7 vs 76), HOS-ADL (82 vs 76.8), and HOS-SSS (71.4 vs 65.3; P > .001) as compared with the TC group. Conclusion: Patients undergoing complete capsular closure during hip arthroscopy showed improved patient-reported and surgical outcomes when compared with those with unrepaired T-capsulotomy or interportal capsulotomy. These results suggest that repair after capsulotomy may be a favorable arthroscopic capsular management technique.