This paper aims to analyze the clinical efficacy of minimally invasive osteotomy combined with Ilizarov technique in the treatment of knee osteoarthritis with varus deformity. 80 patients with knee osteoarthritis and varus deformity who were treated in our hospital from January 2022 to May 2023 were selected, all of whom were affected by one knee. They were randomly divided into groups, including the study group and the control group, each with 40 patients. Patients in the control group were treated with fibula-tibial osteotomy and internal fixation, and patients in the study group were treated with minimally invasive osteotomy combined with Ilizarov technique. The operation time of the patients in the study group was significantly longer than that of the control group (P < 0.05). The intraoperative blood loss of the patients in the study group was significantly more than that of the control group (P < 0.05). The hospitalization expenses of the patients in the study group were significantly more than those of the control group (P < 0.05). The postoperative femorotibial angle and mechanical axis offset distance in the study group were significantly smaller than those in the control group (P < 0.05). The postoperative New York Hospital for Special Surgery (HSS) scores of the study group were significantly higher than those of the control group (P < 0.05). The postoperative visual analogue scale (VAS) score of the study group was significantly lower than that of the control group (P < 0.05). The range of motion of the knee joint in the study group was significantly greater than that in the control group (P < 0.05). The incidence of tendon injury, infection, and nerve injury in the study group (2.50%) was significantly lower than that in the control group (30.00%) (P < 0.05). Minimally invasive osteotomy combined with Ilizarov technique can be applied in the treatment of knee osteoarthritis with varus deformity, although the operation time is longer, with more intraoperative blood loss and higher treatment cost, but it has no effect on the femorotibial angle and mechanical axis deviation of the patient. It can significantly improve the movement distance, knee joint function, and knee joint range of motion, and significantly reduce the postoperative pain of patients, reduce the incidence of complications, and thus has high clinical application value.