Background: The knee is the most commonly injured joint because of its anatomical structure, its exposure to external forces, and its functional demands. Orthopaedic surgeons previously relied on clinical evaluation for diagnosing any internal derangement of the knee joint. With the advent of new clinical methods for diagnosing ligament injuries and cartilage defects, there are very less studies comparing the accuracy of all three methods, clinical examination, magnetic resonance imaging (MRI) and arthroscopy to reach a definitive diagnosis.Objective: This study aims to compare the sensitivity, specificity, accuracy and predictive values of clinical examination and MRI with that of arthroscopy which is the ideal investigation of choice for cartilage defects and internal derangements of the knee.Material and methods: A prospective, observational and hospital-based study was done on patients with internal derangement of knee and cartilage defects. Clinical examination (based on the clinical tests for each ligament), MRI (1.5 T) and arthroscopy were done on all patients, the findings of which were compared using the Chi-square test. The following parameters were assessed while using arthroscopy as the gold standard of reference: accuracy, specificity, sensitivity, positive predictive value (PPV), and negative predictive value (NPV).Results: Anterior cruciate ligament (ACL) was the most common ligament to be injured followed by the medial meniscus. The overall accuracy of clinical evaluation and MRI to diagnose meniscal injuries was found to be 94% and 91% respectively. The clinical examination had sensitivity and specificity of 96% and 82% in diagnosing ACL tears, respectively, whereas MRI had sensitivity and specificity of 88% and 76% respectively. For the medial meniscus, the clinical examination had sensitivity and specificity of 93% and 96% respectively whereas MRI had a sensitivity of 100% and specificity of 89%. We observed that the accuracy of MRI for grading ACL and meniscal tears was similar i.e. 79% and 78% respectively, but was slightly low (70%) for grading of chondromalacia patellae.Conclusion: This study supports the use of MRI and clinical assessment in the diagnosis of chondral defects and internal knee derangement. Clinical tests are reliable and have high sensitivity in diagnosing ACL tears and chondral defects when compared to MRI. Not all lesions should routinely undergo MRI for diagnostic purposes; only a few circumstances warrant its usage. MRI is less reliable in grading ACL tears, meniscal tears and chondral injuries.