The authors report the case of a giant medial meniscal cyst in an osteoarthritic knee of an 82-year-old woman that was successfully treated with only arthroscopic cyst decompression. The patient noticed a painful mass on the medial side of the right knee that had been gradually growing for 5 years. Magnetic resonance imaging showed an encapsulated large medial cystic mass measuring 80×65×40 mm that was adjacent to the medial meniscus. An accompanying horizontal tear was also detected in the middle and posterior segments of the meniscus. The medial meniscus was resected up to the capsular attachment to create bidirectional flow between the joint and the cyst with arthroscopic surgery. Magnetic resonance imaging performed 14 months postoperatively showed that the cyst had completely disappeared, and no recurrence was observed during a 2-year follow-up period. An excellent result could be obtained by performing limited meniscectomy to create a channel leading to the meniscal cyst, even though the cyst was large. Among previously reported cases of meniscal cysts, this case is the largest to be treated arthroscopically without open excision.