We present the case of a 28-year-old competitive runner with iliotibial band (ITB) friction syndrome associated with a synovial cyst. Magnetic resonance imaging (MRI) did not demonstrate a fluid collection. However, open exploration revealed a large cyst beneath the ITB arising from the capsule of the knee proximal to the lateral meniscus. The cyst disappeared on extension. The pre-operative MRI scan may have revealed the cyst, if it had been taken with the knee flexed.