Middle-aged men and women with degenerative meniscal tears constitute a large group of patients presenting with knee pain, sometimes accompanied with swelling and loss of function. Many meniscal tears occur without a trauma in physically active individuals as well as in older people and could be a part of early osteoarthritis. Partial arthroscopic meniscectomy is the most common orthopaedic procedure and is used to treat patients with meniscal tears. Many patients report improvement after arthroscopy referring especially to reduced knee pain, better knee function and improved quality of life. However, similar results have also been obtained with conservative treatment (physical therapy) of patients with degenerative meniscal tears. Accordingly, the aim of this study is to assess the efficacy of arthroscopic partial meniscectomy for the treatment of degenerative tear of medial meniscus of the knee using a double-blind, placebo controlled, randomised trial. The outcome of arthroscopic partial meniscectomy (vs. sham surgery) is assessed using the Lysholm knee score and pain at rest and activity (VAS) at 2, 6 and 12 months after the operation. In addition, the functional outcome is assessed using the WOMET knee score (a disease-specific quality of life -knee score development on the assessment of meniscal pathology), the general quality of life score (15-D), and cost-effectiveness analysis.