Meniscal cysts are rare and often are a result of extrusion of synovial fluid through a tear of the meniscus, resulting in a one-way valve effect of the tear. Arthroscopic partial meniscectomy of the meniscus with intra-articular cyst drainage has become the standard of care. We report a case of an unusually large symptomatic medial meniscal cyst, situated postero-medially and pressing on the posterior cruciate ligament, which was initially clinically misdiagnosed as a Baker’s cyst. The patient had difficulty and pain on squatting. He was successfully treated with arthroscopic debridement and needle decompression; a rarity in literature for such a voluminous perilabral cyst tenting the posterior cruciate ligament. This procedure has the advantage of being able to obtain the cystic fluid for histological and cytological analysis before debridement. This case also highlights the importance of the use of Magnetic Resonance Imaging (MRI) to accurately diagnose a central, posterior knee swelling.