We present the case of an unusual and serious complication of hip arthroscopy due to the severance of the inferior gluteal artery. The lesion induced a severe anemic condition and the formation of a large pseudoaneurysm, which compressed the sciatic nerve and left permanent neurologic sequelae. To our knowledge, this is the first reported case of its kind. We also describe how to establish a safe posterior hip joint arthroscopic portal to avoid such a complication.