Popliteal cysts represent one of the commonest knee pathologies in the adult population. The vast majority of cases may be treated conservatively as symptoms tend to resolve spontaneously. However, few patients may experience persistent pain and nerve-related symptoms not responding to conservative management. We present a case of a 46-year-old patient who suffered from tibial nerve palsy due to a popliteal cyst that was treated successfully with combined open and arthroscopic procedure. It is important to understand that popliteal cysts rarely may lead to tibial nerve entrapment and in selected cases operative management may be indicated.