The pathogenesis of osteonecrosis of the knee remains largely unexplained. MRI has become the mainstay of diagnosis and screening, especially for lesions in the early stages of the disease. Treatment encompasses nonoperative and operative interventions. With regard to the latter, recent studies have shown that the role of biologic substitutes is evolving, core decompression continues to be a successful option for patients with early osteonecrosis, and total knee arthroplasty provides the best outcomes for patients with advanced osteonecrosis. In addition, unicompartmental knee arthroplasty for selected patients has produced good results, and several case studies have indicated promising outcomes with the use of tissue-engineered cartilage, although additional experience with long-term data is needed before this option becomes part of the general armamentarium. In this review, we provide an update on the pathophysiology and treatment of osteonecrosis of the knee based on the recent literature.