The gold standard treatment of hip dysplasia is a peri-acetabular osteotomy (PAO). Labral tears are seen in the majority of patients presenting with hip dysplasia and diagnosed using Magnetic Resonance Imaging (MRI). The goal was to (1) evaluate utility/value of MRI in patients undergoing hip arthroscopy at time of PAO, and (2) determine whether MRI findings of labral pathology can predict outcome. A prospective randomized controlled trial was conducted at tertiary institutions, comparing patients with hip dysplasia treated with isolated PAO versus PAO with adjunct hip arthroscopy. This study was a subgroup analysis on 74 patients allocated to PAO and adjunct hip arthroscopy (age 26±8 years; 89.2% females). All patients underwent radiographic and MRI assessment using a 1.5-Tesla with or 3-Tesla MRI without arthrography to detect labral or cartilage pathology. Clinical outcome was assessed using international Hip Outcome Tool-33 (iHOT). 74% of patients (55/74) were pre-operatively diagnosed with a labral tear on MRI. Among these, 41 underwent labral treatment (74%); whilst among those without a labral tear on MRI, 42% underwent labral treatment (8/19). MRI had a high sensitivity (84%), but a low specificity (56%) for labral pathology (p=0.053). There was no difference in pre-operative (31.3±16.0 vs. 37.3±14.9; p=0.123) and post-operative iHOT (77.7±22.2 vs. 75.2±23.5; p=0.676) between patients with and without labral pathology on MRI. Value of MRI in the diagnostic work-up of a patient with hip dysplasia is limited. MRI had a high sensitivity (84%), but low specificity (44%) to identify labral pathology in patients with hip dysplasia. Consequently, standard clinical MRI had little value as a predictor of outcome with no differences in PROM scores between patients with and without a labral tear on MRI. Treatment of labral pathology in patients with hip dysplasia remains controversial. The results of this subgroup analysis of a prospective, multi-centre RCT do not show improved outcome among patients with dysplasia treated with labral repair.