The advent of computer-assisted knee replacement surgery has focused interest on the alignment of the components. However, there is confusion at times between the alignment of the limb as a whole and that of the components. The interaction between them is discussed in this article. Alignment is expressed relative to some reference axis or plane and measurements will vary depending on what is selected as the reference. The validity of different reference axes is discussed. Varying prosthetic alignment has direct implications for surrounding soft-tissue tension. In this context the interaction between alignment and soft-tissue balance is explored and the current knowledge of the relationship between alignment and outcome is summarised.