Arthroscopic techniques are applicable in the treatment of stage 3 and intractable stage 2 impingement syndrome of the shoulder. While adhering to Neer's guidelines for decompression of the subacromial space, arthroscopy further allows for outpatient surgery, less disturbance of the deltoid function, less scarring, fewer complications, and a thorough diagnostic evaluation of the glenohumeral joint and rotator cuff. A surgical technique utilizing the lateral acromial portal is described. Three and one-half years of clinical experience is evaluated and guidelines are suggested.