OBJECTIVE: To assess the use of elective knee arthroscopy procedures for all adults 20 years and older, and for adults with a concomitant diagnosis of osteoarthritis (OA) in Victoria. DESIGN, SETTING AND PATIENTS: Retrospective, longitudinal cohort study of 807 030 elective orthopaedic admissions using routinely collected public and private hospital data from 1 July 2000 to 30 June 2009. MAIN OUTCOME MEASURE: Trends in rates of elective knee arthroscopy in the time period (defined as a statistically significant change in the incident rate ratio for each financial year with respect to the reference year). Subgroup analyses were undertaken for patients with an associated diagnosis of OA. RESULTS: There were 190 881 admissions for 159 528 patients having an elective knee arthroscopic procedure. There was a significant decrease in arthroscopic procedures from the 2000-01 financial year, after adjusting for growth in elective orthopaedic volume and relevant patient and hospital characteristics. The trend did not apply to patients with osteoarthritis of the knee. A significant shift in the use of multiday procedures undertaken in high volume, public hospital settings to same-day admissions in the private sector was also identified. CONCLUSIONS: The overall rate of elective knee arthroscopy in Victorian hospitals has decreased. There has been no sustained reduction in arthroscopy use for people with a concomitant diagnosis of OA, despite published evidence questioning the effectiveness of the procedures.