Background: Roughly 30% of patients with chronic lateral ankle instability (CLAI) have long-lasting painful instability requiring surgical intervention. Ligament reconstruction with the traditional open method and using tendon allografts can provide sufficient mechanical stability for severe CLAI. Arthroscopic ligament reconstruction with tendon allograft has recently been introduced to treat CLAI. Purpose: In this study, we describe an arthroscopic ligament reconstruction procedure involving the use of the tendon allograft for patients with CLAI, and we compare the efficacy of this procedure with open ligament reconstruction with tendon allograft. Study Design: Cohort study; Level of evidence, 3. Methods: We enrolled 10 patients (4 men and 6 women) with CLAI (mean age, 37.3 years; range, 16-57 years) who underwent arthroscopic ligament reconstruction with tendon allografting between November 2017 and June 2019. The control group consisted of 10 patients who received open tendon allograft reconstruction. Preoperative and 2-year postoperative functional outcomes were evaluated using the American Orthopaedic Foot & Ankle Society ankle-hindfoot scale (AOFAS), Karlsson Ankle Functional Score (KAFS), pain visual analog scale (VAS), 12-Item Short Form Health Survey (SF-12), and Tegner activity score (TAS). Results: The mean operative time was 118 and 110 minutes in the arthroscopic and open groups, respectively. At 2-year follow-up, scores on the AOFAS improved significantly compared with preoperatively, from 71.3 to 96.4 ( P = .006) in the arthroscopic group, and from 68.6 to 96.7 ( P = .005) in the open group. The postoperative AOFAS, VAS, KAFS, and SF-12 scores did not differ significantly between the 2 groups; however, the TAS score was significantly higher in the arthroscopic reconstruction group compared with in the open group (7 vs 6.1, respectively; P = .01). Conclusion: Arthroscopic ligament reconstruction with tendon allografting resulted in sufficient ankle stability and no donor-site morbidity. This procedure can yield similar functional outcomes to open reconstruction technique and may be an option for the management of CLAI.