The purpose of this study was to evaluate prospectively the arthroscopic findings in the lateral compartment of knees with posterolateral knee complex injuries, to help identify individual injured anatomic structures, and to assist in the clinical identification of these injuries. Thirty of 33 consecutive knees noted to have grade 3 posterolateral knee complex injuries on preoperative evaluations and examinations under anesthesia underwent arthroscopic evaluation concurrently with open reconstruction. The arthroscopic evaluation revealed a significant number of pathologic changes in the lateral compartment that may have gone undetected if only an open reconstruction had been performed. Tears were identified arthroscopically in 25 (83%) of the anteroinferior, 22 (73%) of the posterosuperior, and 14 (47%) of the posteroinferior popliteomeniscal fascicles. Injuries to the coronary ligament (80%) and meniscotibial portion of the midthird lateral capsular ligament (73%) were also frequently seen. Other structures injured included the meniscofemoral portion of the posterior capsule (37%), the ligament of Wrisberg (33%), and the meniscofemoral portion of the midthird lateral capsular ligament (10%). Ten avulsions (33%) of the popliteal tendon origin off the femur were also identified. Identification of these injured components greatly facilitated open reconstruction of injuries to the posterolateral complex of the knee. All 30 knees were noted to have greater than 1 cm of lateral joint laxity with application of a varus stress. When an unexpected amount of lateral joint laxity is seen arthroscopically (a "drive-through" sign) in a patient with suspected ligamentous instability, one should consider a diagnosis of posterolateral knee complex injury.