In a prospective double-blind study, the capability of magnetic resonance imaging (MRI) and arthroscopy in the detection and grading of meniscal degenerations is evaluated by correlating MRI findings and arthroscopic diagnoses with a histologic grading model. In 82.8% of our results, grading based on MRI studies corresponded with the histologic grading classification. In 12 instances a meniscal degeneration verified at light microscopy was not detected at MRI, whereas in 15 cases tomography yielded a false-positive result. The overall accuracy was calculated to be 0.93 with a specificity of 0.79 and a sensitivity of 0.96. Concerning the evaluation of meniscal degenerations, MRI provides a positive predictive value of 0.95 and a negative predictive value of 0.82. Compared with the diagnostic specificity of the anterior and posterior zones, that of the intermediate segment of the meniscus is significantly reduced (p < 0.001). At arthroscopy, meniscal degenerations were diagnosed with an overall accuracy of 38.8%, a sensitivity of 27.5%, and a specificity of 75.5%. In 80 cases of grade 3 abnormalities, five false-negative diagnoses were made initially. These results suggest that MRI offers a valuable diagnostic potential providing reliable information about the internal consistency of the meniscus complementary to diagnostic arthroscopy.