The synovial capsule of the hip joint lines the internal surface  of the fibrous capsule. The synovial capsule forms a sleeve for the ligamentum teres, lines the acetabular fossa and covers the fatty pad in the acetabular notch. It is attatched to the edges of the acetabular fossa and to the transverse acetabular ligament. The synovial capsule protrudes inferiorly to the fibrous capsule on the posterior aspect and forms the obturator externus bursa which protects the tendon of the obturator externus muscle.