After more than 15 years of experience, arthroscopic shoulder stabilization is becoming less controversial. Historically, recurrence rates following arthroscopic stabilization have been higher than with open stabilization. Although a negligible advantage may exist in terms of expedited postoperative rehabilitation and improved postoperative recovery of motion, critics suggest that its use in contact athletes be limited. The indications for arthroscopic stabilization are expanding, in part, because of improved understanding of the pathophysiology of shoulder instability. Understanding the mechanism of recurrent instability following arthroscopic stabilization offers clues to how physicians can prevent unsatisfactory results in the future. With newer instrumentation and the ability to thermally treat capsular tissue, coexisting pathology, such as capsular plastic deformation, rotator interval lesions, and unrecognized intra-articular pathology, can now be addressed arthroscopically. The judicious use of these techniques is warranted until long-term study results become available. Ideal patients for arthroscopic Bankart repair have a discrete Bankart lesion; a robust, well-developed IGHL; no significant capsular laxity or intraligamentous injury; and an absence of concomitant intra-articular pathology. Additional findings on MR imaging or CT evidence of a discrete labral lesion and pure unidirectional anterior instability during EUA are also good prognostic indicators for arthroscopic Bankart repair. Arthroscopic criteria that render patients less appropriate for an arthroscopic repair include capsular injury, capsular laxity, a bony Bankart lesion, glenohumeral arthritis, and a rotator cuff tear. The authors' believe that either absent or patulous, poorly developed glenohumeral ligaments represent a poor prognostic indicator for a successful outcome following standard arthroscopic Bankart repair. Individuals with poor-quality tissue are more predictably managed using open capsulorrhaphy. Patients with pathologic ligamentous laxity in the absence of a Bankart lesion or any apparent intraligamentous injury to the IGHL are also good candidates for treatment with an open capsulorrhaphy. Findings determined from a thorough physical examination, EUA, and the pathology appreciated during diagnostic arthroscopy help to appropriately choose the surgical procedure that effectively addresses pathology in patients who present with recurrent traumatic anterior instability. Patient preferences and surgical experience are important determinants of procedure selection, and current arthroscopic techniques lack the versatility to uniformly address the entire spectrum of pathology that may be associated with traumatic anterior shoulder instability. Surgeons should always be prepared to convert to an open-stabilization technique if the arthroscopic technique is deficient in addressing all pathology identified at the time of surgery.