Sterilization of allografts for anterior cruciate ligament (ACL) reconstruction has become an important prerequisite to prevent disease transmission. However, current sterilization techniques impair the biological or mechanical properties of such treated grafts. Peracetic acid (PAA) has been successfully used to sterilize bone allografts without these disadvantages and does not impair the mechanical properties of soft tissue grafts in vitro. We asked whether PAA sterilization would influence recellularization, restoration of crimp length and pattern, and revascularization of ACL grafts during early healing. We used an in vivo sheep model for open ACL reconstruction. We also correlated the histologic findings with the restoration of anteroposterior stability and structural properties during load-to-failure testing. PAA slowed remodeling activity at 6 and 12 weeks compared to nonsterilized allografts and autografts. The mechanical properties of PAA grafts were also reduced compared to these control groups at both time points. We conclude PAA sterilization currently should not be used to sterilize soft tissue grafts typically used in ACL reconstruction.