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Pigmented villonodular synovitis (PVNS) is a monoarticular, benign tumor arising from the synovium. Although classically treated with open synovectomy, arthroscopic treatment has demonstrated good clinical outcomes. The arthroscopic management of hip PVNS has been described as technically challenging due to difficulty obtaining the appropriate exposure. The purpose of this technical report is to describe a novel technique that allows for sound excision of PVNS during hip arthroscopy using a puncture capsulotomy. Full visualization throughout the central and peripheral compartments is key to achieving meticulous surgical excision and ablation, with careful attention to the medial and lateral synovial folds and gutters. It is important to avoid chondral injury by using a high outflow rate of irrigation to maintain a constant temperature, to ablate the blood supply of nodular lesions, and to not use a shaver as this may disseminate tumor cells. Multifactorial advancements in hip arthroscopy have permitted adequate visualization and exposure of PVNS lesions, making them amenable to arthroscopic synovectomy. Puncture capsulotomy does not require capsular closure, preserves the iliofemoral ligament, and minimizes exposure of extra-articular structures to the hip joint environment. Recurrence rates are lower in arthroscopic management compared with open management, at 7.7% and 17.8%, respectively.