The management of osteoarthritis of the knee associated with patellar instability secondary to external tibial torsion > 45 degrees is challenging. Patellofemoral biomechanics in these patients cannot be achieved by intra-articular correction using standard techniques of total knee replacement. We reviewed seven patients (eight knees) with recurrent patellar dislocation and one with bilateral irreducible lateral dislocation who had undergone simultaneous total knee replacement and internal tibial derotational osteotomy. All had osteoarthritis and severe external tibial torsion. The mean follow-up was for 47.2 months (24 to 120). The mean objective and functional Knee Society scores improved significantly (p = 0.0001) from 29.7 and 41.5 pre-operatively to 71.4 and 73.5 post-operatively, respectively. In all patients the osteotomies healed and patellar stability was restored. Excessive external tibial torsion should be identified and corrected in patients with osteoarthritis and patellar instability. Simultaneous internal rotation osteotomy of the tibia and total knee replacement is a technically demanding but effective treatment for such patients.