Purpose The anterior cruciate ligament in the knee is commonly prone to injuries. Reconstruction of this ligament with hamstring tendon has been time-tested but peroneus longus autograft is also gaining popularity. However, very limited literature is available comparing the two grafts. This study aims to compare the functional outcome and donor site morbidity between hamstrings and peroneus longus autograft in anterior cruciate ligament reconstruction. Methods A prospective randomised study was conducted on 45 patients, who underwent anterior cruciate ligament reconstruction. Patients were assigned into Hamstring group and the Peroneus longus group. Functional outcome was assessed using Lysholm score and Modified Cincinnati scores for the knee joint and American Orthopedics Foot and Ankle Scoring for ankle joint. Donor site morbidity was assessed by measuring flexion and extension strength of the knee and plantar flexion and eversion strength of the ankle by handheld dynamometer preoperatively and postoperatively at 6 months and 1 year follow up. Results Functional outcome of the knee showed significant improvement in peroneus longus group (p-value 0.002) compared to hamstring group. Even though there was minimal reduction in functional outcome of the ankle at 6 months follow-up in peroneus longus group, it improved at one year follow-up. While assessing the donor site morbidity at the knee joint, knee flexion strength showed improvement in the group (p-value 0.02) but reduced in the hamstring group where the hamstring tendon was harvested. Knee extension strength in the hamstring group scored marginally better than the peroneus longus group, which was not statistically significant (p-value 0.5). Conclusion Autologous peroneus longus tendon can be used as a graft of choice in anterior cruciate ligament reconstruction which showed promising results without compromising on the ankle function. Its usage as an alternative source of the graft may be more useful in multi-ligament injuries of the knee joint.