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The role of knee arthroscopy in the management of osteoarthritis is unclear. The purpose of this study was to examine patterns of use of knee arthroscopy, overall and by diagnostic and sociodemographic subgroups, in countries with comparable health-care systems.Administrative databases were used to construct cohorts of adults, twenty years of age or older, who had undergone their first knee arthroscopy in 1993, 1997, 2002, or 2004 either in Ontario, Canada, or in England. For each year, age and sex-standardized rates of knee arthroscopy per 100,000 population were determined overall and by diagnosis, sex, age, and income quintile. Regression analysis, with control for confounders, was used to examine predictors of readmission for primary total knee replacement up to five years after an index knee arthroscopy performed in 1993 or 1997. We also analyzed the records of patients who had undergone primary knee replacement in 2002 to determine the rates of knee arthroscopy in the two years prior to that replacement.In both countries, the proportion of arthroscopic procedures performed to treat internal derangement or dislocation of the knee increased over time; the rates were highest in the highest income quintiles. The study revealed that 4.8% of the patients in England and 8.5% of those in Ontario who had an arthroscopy to treat osteoarthritis in 1997 received a knee replacement within one year after that procedure. The risk of readmission for knee replacement was greater in association with a diagnosis of osteoarthritis, female sex, and an older age at the time of the arthroscopy. Of the patients who had a primary knee replacement in 2002, 2.7% in England and 5.7% in Ontario had undergone a knee arthroscopy in the previous year; the likelihood of the patient having had a prior arthroscopy increased with higher income and increasing age.Variations in knee arthroscopy rates according to age, sex, income, and diagnosis were identified in both countries. Research to determine if these differences are consistent with need is warranted.