The arthroscope has changed the orthopaedist's approach to evaluation of knee injuries. Diagnostic arthroscopy is now well-accepted and has led to operative arthroscopy. The advantages and contraindications of operative arthroscopy are reviewed in this report. The physiologic role of the meniscus is discussed, stressing the importance of leaving normal tissue. Necessary equipment and cost of each of three advancing stages of arthroscopic surgery capability are discussed. A study group of 68 simple meniscectomy patients is presented: 34 treated by traditional arthrotomy and meniscectomy, and 34 by arthroscopic meniscectomy. Parameters assessed included: nights in hospital, postoperative swelling, achievement of 120 degrees flexion, days on crutches, return to full activity, work, and sports. Operating room and total hospital costs are reviewed. Arthroscopic meniscectomy produced earlier complete rehabilitation and at less cost in this series.