We have investigated the changes in the interposed capsule after a Chiari pelvic osteotomy, in an experimental study on dysplastic hips in 20 adolescent rabbits. Radiographic, macroscopic and microscopic observations were made up to 12 months after operation. The new acetabular roof had incorporated the interposed capsule and remodelled completely by six months. By 12 months there was a new, stable hip with continuity between the capsule and the original acetabular cartilage. Histologically, the capsule underwent metaplastic change to fibrocartilaginous tissue after six months, with some hyaline-like cartilage near the joint surface. These changes in the interposed capsule play an important role in the formation of a new joint after a Chiari pelvic osteotomy.