Pigmented villonodular synovitis is a slow, usually monoarticular, progressive proliferative disorder of uncertain etiology involving joint tissue, tendon sheath, and bursae. Pigmented villonodular synovitis has been divided in two forms-diffuse and localized. Localized pigmented villonodular synovitis of the knee joint can present with symptoms of pain, locking and instability. We report a case of a patient who presented with symptoms of recurrent subluxation of patella due to a localized pigmented villonodular synovitis occurring in the medial patellofemoral joint.