The most common surgical approaches in hip arthroscopy are interportal and T-capsulotomy. However, these methods may introduce capsular instability. Puncture capsulotomy preserves capsuloligamentous integrity by avoiding iatrogenic transection of the iliofemoral capsular ligament. To present minimum 2-year functional outcomes for patients who underwent arthroscopic treatment for acetabular labral tears and concomitant femoroacetabular impingement using the puncture capsulotomy technique. Case series; Level of evidence, 4. The authors conducted a retrospective review of prospectively collected data on patients who underwent arthroscopic acetabular labral tear treatment between December 2013 and May 2019. Included were patients aged ≥18 years who underwent hip arthroscopy by a single surgeon and completed a minimum of 2 years of patient-reported outcome measure (PROM) surveys. Intraoperatively, patients underwent hip arthroscopy via puncture capsulotomy to treat labral tears and any concomitant femoroacetabular impingement. Clinical outcome data consisted of PROMs. A total of 163 hips were included; the mean patient follow-up was 30.4 months (range, 24-60 months; 95% CI, 28.5-32.3 months). Patients had a mean age of 37.9 years (range, 36.1-39.6 years), with a mean body mass index of 25.9 (range, 25.2-26.5). There were significant improvements in mean [95% CI] baseline to final follow-up scores for the 33-Item International Hip Outcome Tool (iHOT-33) (39.6 [36.8-42.4] vs 76.1 [72.7-79.6]), Hip Outcome Score-Activities of Daily Living (70.0 [67.0-73.0] vs 89.3 [87.3-91.3]), modified Harris Hip Score (60.1 [57.9-62.4] vs 84.9 [82.5-87.2]), and Hip Outcome Score-Sports Specific Subscale (41.8 [37.9-45.6] vs 75.7 [71.7-79.7]) (P < .001 for all). Additionally, the mean [95% CI] visual analog scale pain scores were noted to significantly improve throughout the duration of the postoperative period (from 6.3 [5.9-6.7] to 2.2 [1.8-2.6]; P < .001). There were no incidences of infection, avascular necrosis of the femoral head, dislocation/instability, or femoral neck fracture. At the 2-year follow-up, 81.0%, 62.0%, and 58.9% of hips achieved previously published clinically meaningful iHOT-33 thresholds for minimally clinically important difference, Patient Acceptable Symptom Score, and substantial clinical benefit, respectively. Puncture capsulotomy demonstrated significantly improved functional and clinically meaningful outcomes at a minimum 2-year follow-up, along with a minimal complication rate.