Diffuse pigmented villonodular synovitis of the knee is a difficult tumor to eradicate. We report our experience with a combined open posterior and anterior synovectomy with and without adjuvant postoperative radiation therapy in patients with advanced extracapsular disease. A single surgeon operated on forty patients, with an average age of thirty-five years (range, fourteen to sixty-eight years), who had diffuse pigmented villonodular synovitis of the knee. All patients had been referred to us after having initially undergone arthroscopic or open surgical procedures without eradication of the disease. Patients were retrospectively placed into one of three groups: Group I received surgery alone (five patients), Group II had surgery and intra-articular radiation synovectomy with use of dysprosium-165 (thirty patients), and Group III had surgery and external beam radiation (five patients). Adjuvant radiation was performed three months postoperatively. Magnetic resonance imaging was used for all patients for preoperative staging and postoperative follow-up. The average Knee Society score for the entire series improved from 61 points preoperatively to 92 points at the time of follow-up, at an average of five years (range, 1.5 to eight years) (p < 0.001). There was also a significant (p < 0.001) increase in the average range of motion of the knees across all groups. On the basis of the Knee Society scores, thirty-seven patients (93%) had a good or excellent result, two patients had a fair result, and one patient had a poor result. Complications included stiffness requiring manipulation in three knees, one case of reflex sympathetic dystrophy, advanced osteoarthritis leading to a total knee replacement in four patients, and seven recurrences (a prevalence of 18%) after operative treatment and radiation therapy. This surgical technique allows excellent visualization and removal of intra-articular and extra-articular diffuse pigmented villonodular tissue and yields excellent functional results and a low prevalence of knee stiffness. However, the rate of recurrence detected by magnetic resonance imaging was 18%. Adjuvant intra-articular radiation therapy may be beneficial for eradication of small foci of residual disease, but complete resection of all pigmented villonodular tissue appears to be the key to preventing recurrence. Magnetic resonance imaging was essential for accurate preoperative staging of the tumor and for follow-up since the presence of residual disease did not reliably correlate with the clinical findings. Patients with minimal degenerative arthritis and primary or recurrent extra-articular disease will benefit most from this approach.