Multidirectional instability is very complex pathology. Excessively redundant capsule is one of the important reasons causing symptomatic laxity in multiple planes. Arthroscopic techniques are not able to reproduce the potential of open methods to reduce the joint volume. Most of the studies based their measurements on cadaver model. The aim of the study was to develop simple and reproducible technique to perform arthroscopic capsular shift and measure its volume reduction potential in both cadaveric and clinical setting. Technique is described in the paper. Capsular shift was applied both in cadaver and clinical scenario. Based on group of 5 cadaver shoulder specimen, glenohumeral joint volume was reduced from average of 19.4 ± 7.8 ml to 11.9 ± 4.5 ml following arthroscopic capsular shift (37.9% volume reduction). Clinical material consisted of 12 consecutive patients shoulder with instability and joint laxity undergoing the arthroscopic capsular shift. Average glenohumeral volume before capsular shift was 43.5 ± 10 ml and was reduced to 17.5 ± 4.3 ml (58.8% volume reduction). Arthroscopic capsular shift presented in this paper seems to be relatively easy to perform and safe procedure. The technique provides significant decrease in joint volume in both cadaveric and clinical parts of the study. ELECTRONIC SUPPLEMENTARY MATERIAL: The online version of this article (doi:10.1007/s00590-011-0865-z) contains supplementary material, which is available to authorized users.