In previous studies, the origin of synovial sarcoma directly from synovium has not been satisfactorily established. This case report describes the light and electron microscopic features of a biphasic synovial sarcoma occurring within the popliteal fossa. At surgery, a cystic mass was identified in relationship to the semitendinosus tendon at the anatomical site of the semitendinosus bursa. The tumour originated from the inner surface of the bursa as multiple papillary projections with no evidence of extension beyond the capsule of the bursa. Portions of the synovial surface were hyperplastic but otherwise normal. The findings indicate that biphasic synovial sarcoma can arise directly from synovium and support the hypothesis of a mesenchymal histogenesis for this tumour.