Patients who have multidirectional instability of the shoulder routinely have subluxations or dislocations in at least 2 if not 3 directions (anterior, inferior, and posterior). Increased capsular laxity is the most common pathology underlying this condition, but other lesions may also be present. Physical rehabilitation is the traditional initial treatment of this condition. Open capsular shift surgery has been the accepted means of surgical correction for this disorder over the last 20 years, and is successful in 80% to 95% of patients. Recently, arthroscopic thermal capsulorrhaphy and suture capsulorrhaphy have been performed with high degrees of patient satisfaction. Arthroscopic suture capsulorrhaphy is successful in 84% to 96% of patients with little associated morbidity. With equivalent success rates for both open and arthroscopic techniques, arthroscopic procedures are now the preferred approach to treatment of this challenging group of patients.