Hip pain on the outside of your hip, upper thigh or outer buttock is usually caused by problems with muscles, ligaments, tendons and other soft tissues that surround your hip joint.Hip pain can sometimes be caused by diseases and conditions in other areas of your body, such as your lower back or your knees.This type of pain is called referred pain. Most hip pain can be controlled with self-care at home. 1  Causes.ip pain on the outside of your hip, upper thigh or outer buttock is usually caused by problems with muscles, ligaments, tendons and other soft tissues that surround your hip joint.