The thin balloon like lining of the knee joint is also known as the Articular Capsule. The capsule is made up of a thin but strong fibrous membrane. Within the capsule are bands of tissue which are blended with it and strengthen it. Within the capsule lies the synovial tissue which produces the joint lining fluid which lubricates and provides nutrients to the knee.
At the front of the knee this synovial membrane acts as a capsule and most of the strength comes from a layer called the fascia lata and from the tendons surrounding the joint. The back part of the capsule is found on the sides of and in front of the cruciate ligaments (technically these are actually outside the knee joint cavity). Behind the cruciate ligaments is the oblique popliteal ligament which is thickened by fibers from the Semimembranosus tendon.
The capsule and synovium are injured with any significant knee injury but tend to heal rapidly. There are times when the capsule and it’s associated ligaments heal in a lengthened position and no longer function the way they are supposed to. One example of this is dislocation of the patella with tearing of the Medial PatelloFemoral Ligament (MPFL). If the MPFL does not heal then a reconstruction of this tissue just outside the capsule is required.