Giant cell tumor is a predominantly benign condition but often the tumor is locally aggressive and tends to have high rate of recurrence and it can evolve into a malignant tumor. Thus the lesions have a practically difficult therapeutic problem for the orthopaedic surgeon and any method of treatment has not been satisfied. Between March 1984 and March 1993, clinical observation was carried out on 22 cases of giant cell tumor of bone to analyse the recurrence rate and functional evaluation of the joint according to the treatment methods, pathological grade and cortical destruction. The mean follow-up time was 75. 2 months. The recurrence rate of the intralesional excision group was 54.5% and that of the wide excision group was 9%, There was no relationship between the pathologic grade and recurrence rate. There was no recurrent case in the grade I cortical destruction but almost all of recurrence was occurred in the grade I or II cortical destruction. The functional result of the giant cell tumor occurred around the knee joint was that the mean ratings in the intralesional excision group were 79% and in the wide excision group were 51%. In conclusion, to achieve better joint function and less recurrence rate, intralesional or marginal excision with heat using bone cement or with chemical cauterization using phenol and alcohol can be used for cases of radiological grade I or II, and wide excision for grade III.