The iliocapsularis muscle (ICM), a small and often overlooked muscle of the anterior hip, has recently gained attention for its potential clinical and surgical relevance. Despite being anatomically distinct and commonly present, the ICM remains underappreciated among clinicians and anatomists. This narrative review aims to synthesize recent anatomical and clinical literature on the ICM, focusing on its origin, insertion, innervation, vascular supply, anatomical variations, histological features, and functional significance. The ICM originates from the anteromedial hip capsule and the anterior inferior iliac spine, typically inserting distal to the lesser trochanter. Its proposed function includes tightening the anterior hip capsule and stabilizing the femoral head. Electromyographic studies suggest that the ICM plays an active role during hip flexion and dynamic gait phases. Anatomical variations, including variant origins and insertions, have been documented, along with unique innervation and fascial compartmentalization. Clinically, the ICM serves as a useful landmark in total hip arthroplasty and periacetabular osteotomies. Its hypertrophy or atrophy has been linked to hip pathologies such as acetabular dysplasia and femoroacetabular impingement. Imaging modalities, including ultrasound and elastography, have further supported its diagnostic utility. This review emphasizes the need for greater recognition of the ICM’s structure and function, underscoring its relevance in orthopedic procedures and hip pathology diagnostics.