Due to both the currently available technology and anatomic constraints of the hip joint, capsulotomy is necessary to perform hip arthroscopy. Proper management of the hip capsule is a crucial component of hip arthroscopy that has evolved with increased awareness that capsular closure during hip arthroscopy reestablishes the normal anatomy of the iliofemoral ligament and thus restores the biomechanical characteristics of the hip joint. This article reviews the biomechanical rationale for hip access and closure, as well as recent clinical studies on patient-reported outcomes with regard to capsular closure. Additionally, capsulotomy techniques including capsulectomy as well as interportal and T-capsulotomy techniques are reviewed, and the authors' preferred technique for capsular management is described. While capsular closure is technically challenging and increases operative time, meticulous closure improves outcomes by reducing postoperative micro- and gross instability.