The objective of this prospective study was to determine the prevalence of popliteal cysts and the associated intraarticular lesions in a group of 100 patients scheduled for arthroscopic surgery of the knee and to evaluate the results of arthroscopic treatment for these intraarticular lesions without removal of the cyst. One hundred patients without any knee complaints served as a control group. The diagnosis of a popliteal cyst was made on the basis of ultrasonography. The prevalence of popliteal cysts was 20% in the study group and 0% in the control group. Patients with a popliteal cyst had a significantly higher prevalence of medial meniscal tears (70% versus 19%) and of chondral lesions (85% versus 28%). Tears of the lateral meniscus, however, were more evenly distributed (20% versus 36%). Sixteen of 20 patients with a popliteal cyst were available for a follow-up examination 1 to 3 years after the arthroscopic procedure. Eleven popliteal cysts had persisted. Chondral lesions were the most relevant prognostic factor; all patients with persisting cysts had grade III or grade IV lesions. We conclude that the popliteal cyst is a secondary phenomenon and that treatment should address the underlying intraarticular lesions. In cases of osteoarthritis it may be impossible to treat the chondral lesion successfully in terms of eliminating the effusion.