In the treatment of patients with popliteal cysts (Baker's cysts), we generally need to address the intra-articular pathologies, most commonly, medial meniscal tears and concomitant connecting valvular mechanisms responsible for the formation and recurrence of the cyst. We introduce here an arthroscopic technique that can treat the associated intra-articular pathology and correct the valvular mechanism of the capsular fold. The most important step is to locate the opening connection between the joint cavity and the popliteal cyst at the posteromedial compartment. The opening is found at the posteromedial side of the medial head of the gastrocnemius after inferior displacement of the capsular fold, which overlies the opening. It is helpful to rotate the bevel of the arthroscope upward to the 11-, 12-, and 1-o'clock positions for most effective visualization of the capsular fold. After the opening connection of the cyst is found, the capsular fold is resected with basket forceps and a shaver inserted through the posteromedial portal to correct the valvular mechanism. Furthermore, we have developed an additional "posteromedial cystic portal," which is located directly above the popliteal cyst and can be effectively used in cystectomy, especially in treatment of cysts that consist of septa and nodules. Arthroscopic popliteal cyst removal with use of an additional posteromedial cystic portal can be effective in treating a cyst with multiple fibrous septa or membranes.