This study analyzed the morphological and biomechanical characteristics of perimeniscal capsule in knee joint thus establishing the roles of these tissues. A total of 10 human cadaver knees were used in this study. Medial meniscus and the adjacently surrounding joint capsules were harvested then sectioned both axially and coronally, followed by scanning electron microscopy analysis. The medial meniscus (anterior, middle, posterior) and the adjacent perimeniscal capsules (superior, peripheral) were biomechanically assessed to ascertain the tensile modulus. Among the perimeniscal capsules, the peripherally located capsules were morphologically different from the superiorly located capsules: The peripheral perimeniscal capsule was thicker and showed circumferentially oriented fibers whereas the superior perimeniscal capsule fibers were thinner and arranged in vertical orientation. The peripheral capsule also yielded significantly greater tensile modulus compared with the superior capsule biomechanically. We conclude that depending on its anatomical location, the perimeniscal capsule consists of fibers of varying orientations. This may be important in maintaining the circumferential hoop tension of the meniscus especially in the presence of circumferentially oriented and thick peripheral capsule fibers, which coincidentally have higher tensile modulus.