Here is a sketch of a crescent-shaped meniscus, with the cyst protruding from it to the side.
The dotted lines show that the cyst communicates with the interior of the meniscus, usually via a horizontal tear of the meniscus.
This fluid-filled sac herniates into the capsular tissues on the joint line, producing a painful lump on the joint line, which can sometimes be reduced by pressing on it. Because of a valve-like action of the opening of the cyst within the meniscus, sometimes the fluid is trapped in it under pressure, and sometimes it escapes and the cyst is less tense.
Although the diagnosis may be clinically fairly obvious, an MRI scan is likely to clinch the diagnosis as the fluid within the meniscal sac will show up white on MRI scan.
Usually arthroscopic surgery is performed to exclude the presence of a horizontal cleavage tear of the meniscus. If this is found, the tear is cleaned out and the cyst decompressed from within the meniscus. A partial meniscectomy may be performed.
If there is no horizontal cleavage tear, the cyst may be approached from the outside of the knee and decompressed, and any meniscal rim problem dealt with during surgery.