Intra-articular lipoma is an exceedingly rare diagnosis. There have been less than 15 documented cases of an intra-articular lipoma of the knee joint. This report presents the first description of an intra-articular knee lipoma treated entirely by arthroscopic methods. Preoperative history, examination, and imaging studies are reviewed. Intraoperative findings, treatment, and postoperative evaluation are discussed as well. Symptomatic intra-articular lipoma of the knee joint can be successfully treated by arthroscopic resection. Differentiating intra-articular lipoma from lipoma arborescens, a similar but more common condition, is important with regards to optimal treatment.