Background: Despite focus on surgical preservation of the chondrolabral junction (CLJ), the transition zone between the acetabular cartilage and labrum, the association between severity of CLJ breakdown and functional outcomes after hip arthroscopy remains unexplored. Purpose: To assess the influence of CLJ breakdown on patient-reported outcome measures (PROMs) at a 24-month follow-up after hip arthroscopy for symptomatic labral tears. Study Design: Cohort study; Level of evidence, 3. Methods: A retrospective review of prospectively collected data was conducted to identify patients ≥18 years of age with a minimum 24-month follow-up who underwent hip arthroscopy by a single surgeon for the treatment of symptomatic labral tears secondary to femoroacetabular impingement. The Beck classification of transition zone cartilage was used to grade CLJ damage; patients with grades 0 to 2 were stratified into the mild CLJ damage cohort, and those with grades 3 and 4 were stratified into the severe CLJ damage cohort. PROMs were collected at baseline and at 3, 6, 12 months, and annually thereafter postoperatively. Linear mixed-effects models were used to compare PROMs. Rates of achieving clinically meaningful thresholds and subsequent surgery rates were also compared. Results: In total, 198 patients met the inclusion criteria, with a mean follow-up of 3.54 ± 1.26 years. A total of 95 patients with severe CLJ damage (mean age, 34.9 ± 10.5 years) were compared with 103 patients with mild CLJ damage (mean age, 38.2 ± 11.9 years). Hip Outcome Score–Activities of Daily Living (HOS-ADL), Non-Arthritic Hip Score (NAHS), and visual analog score for pain were inferior in the severe CLJ group at enrollment and all follow-up time points ( P≤ .05). However, patients with severe CLJ breakdown exhibited greater improvements in HOS-ADL and NAHS at the 24-month follow-up and achieved clinically meaningful thresholds at equivalent rates to patients with mild CLJ breakdown. Subsequent surgery rates were 6.8% and 12.6% in patients with mild versus severe CLJ damage, respectively ( P = .250). Conclusion: Severe CLJ breakdown is associated with increased pain and decreased functional level preoperatively and up to 24 months after hip arthroscopy. Despite this, patients with severe CLJ breakdown experienced greater improvements in functional outcomes at a 24-month follow-up and achieved clinical thresholds at similar rates to patients with mild CLJ damage. Thus, while worse baseline pain and functional levels may indicate severe CLJ breakdown, these patients still benefit substantially from hip arthroscopy.