Background: The optimal management of first-time patellar dislocations remains a subject of debate. While surgical intervention is often recommended to reduce the risk of redislocation, the benefits over conservative treatment regarding knee function and complication rates are not clearly established. This systematic review aims to compare the effectiveness of surgical versus conservative treatment in preventing redislocation and improving knee function, while also considering complication rates. Methods: A comprehensive search of databases, including PubMed, Scopus, and Web of Science, was conducted up to July 2024. Seven randomized controlled trials involving 411 participants were included. The primary outcome was the redislocation rate, with secondary outcomes including knee function, complication rates, and the need for re-interventions. The quality of the studies was assessed using the PEDro scale. Results: Surgical treatment generally resulted in lower redislocation rates compared to conservative management. However, the improvement in knee function was inconsistent, with some studies showing no significant differences or even favoring conservative treatment. Surgical intervention was associated with a higher risk of complications and re-interventions, particularly in older studies with less advanced techniques. Conclusions: Surgical intervention appears effective in reducing redislocation rates but comes with a risk of complications. Conservative treatment remains a viable option, particularly for patients with lower activity levels or higher surgical risks. The decision between surgical and conservative management should be individualized, taking into account patient-specific factors and potential risks. Further high-quality research is needed to provide more definitive guidance.