In this study, we observed the fate of the inverted limbus after closed reduction for the treatment of developmental dysplasia of the hip (DDH) and its impact on acetabular development. Clinical data were reviewed for 26 DDH patients with an inverted or overriding limbus after closed reduction for hip dysplasia. Patients were divided into a residual inversion group (19 cases, 22 hips) and a spontaneous resolution group (7 cases, 7 hips) according to the limbus status at the last follow-up. Differences in the osseous acetabular index (AI) and cartilaginous AI (CAI), the magnitude of limbus inversion, center-edge angle (CEA), height-to-width index (HWI) of the femoral head epiphysis, and avascular necrosis (AVN) at last follow-up were compared. There were no statistically significant differences in the preoperative AI and CAI between groups. The magnitude of limbus inversion after reduction and the AI at the final follow-up in the residual inversion group were both larger than those in the spontaneous resolution group. The CAI, CEA, and HWI were not significantly different between groups. The magnitude of limbus inversion in the residual inversion group did not significantly decrease over time. AVN occurred in five hips in the residual inversion group. No cases of AVN occurred in the spontaneous resolution group. After closed reduction, the inverted limbus was not absorbed in the majority of cases; instead, it evolved into a thin layer of fibrous tissue embedded between the femoral head and acetabulum. This may delay the endochondral ossification of the acetabulum.