Cystic lesions around the knee are a diverse group of entities, frequently encountered during routine MRI of the knee. These lesions range from benign cysts to complications of underlying diseases such as infection, arthritis, and malignancy. MRI is the technique of choice in characterizing lesions around the knee: to confirm the cystic nature of the lesion, to evaluate the anatomical relationship to the joint and surrounding tissues, and to identify associated intra-articular disorders. We will discuss the etiology, clinical presentation, MRI findings, and differential diagnosis of various cystic lesions around the knee including meniscal and popliteal (Baker's) cysts, intra-articular and extra-articular ganglia, intra-osseous cysts at the insertion of the cruciate ligaments and meniscotibial attachments, proximal tibiofibular joint cysts, degenerative cystic lesions (subchondral cyst), cystic lesions arising from the bursae (pes anserine, prepatellar, superficial and deep infrapatellar, iliotibial, tibial collateral ligament, and suprapatellar), and lesions that may mimic cysts around the knee including normal anatomical recesses. Clinicians must be aware about the MRI features and the differential diagnosis of cystic lesions around the knee to avoid misdiagnosis.