Paralabral cysts at the spinoglenoid notch are rare disorders that can potentially lead to compressive suprascapular neuropathy. Given their infrequency, a standard treatment protocol has not yet been established. This study aimed to assess changes in the infraspinatus muscle using magnetic resonance imaging (MRI) and to compare the outcomes of 2 different surgical methods. It was hypothesized that surgical intervention could alleviate compressive neuropathy, with comparable outcomes between the 2 surgical approaches. Cohort study; Level of evidence, 3. This retrospective review encompassed 43 patients undergoing arthroscopic labral repair for a paralabral cyst at the spinoglenoid notch, with cyst decompression (27 patients; labral repair with cyst decompression [LRCD] group) or without cyst decompression (16 patients; labral repair only [LRO] group). Preoperative MRI focused on evaluating the condition of the infraspinatus and teres minor muscles. Electromyography (EMG) was conducted on 36 patients (21 in LRCD and 15 in LRO) to assess suprascapular nerve function. Postoperative evaluations were performed in 35 patients at postoperative 1 year, excluding those lost to follow-up. Postoperative MRI findings (24 patients in LRCD and 11 patients in LRO) and functional outcome scores including recovery of external rotation power were compared with preoperative status in both groups. Preoperative MRI revealed denervation changes or atrophy of the infraspinatus in 26 of the 43 patients (60.4%). Among the 36 patients who underwent preoperative EMG, 21 patients (58.3%; 13 patients in LRCD and 8 patients in LRO) showed evidence of suprascapular neuropathy. A discrepancy between EMG and MRI findings was noted in 10 patients, with 5 patients showing suprascapular neuropathy according to EMG despite normal muscle status on MRI scans, and the remaining 5 vice versa. Notable atrophy of the infraspinatus was seen in 6 patients and teres minor hypertrophy in 5 patients, all of whom exhibited concurrent infraspinatus atrophy. Postoperatively, cyst disappearance was observed in all cases in both LRCD (24 patients) and LRO (11 patients) groups. Denervation changes in the infraspinatus were resolved in all patients. In patients with infraspinatus atrophy, some improvement was noted. Teres minor hypertrophy persisted in 2 of 4 patients. Improvements were similar in both groups (all P > .05). External rotation power improved postoperatively in both groups (from 39.1 ± 18.6 to 50.6 ± 17.7 N in LRCD, P < .001; from 45.1 ± 16.0 to 54.2 ± 10.7 N in LRO, P = .025). Both LRCD and LRO surgical approaches appear to be effective for paralabral cysts at the spinoglenoid notch. Suprascapular neuropathy can be successfully addressed by both methods. However, conditions with severe infraspinatus atrophy and teres minor hypertrophy warrant further investigation in larger series.