To characterize the structure and function of posteromedial knee joint capsule (PMC), uniaxial biomechanical testing, polarized light microscopy (PLM) and environmental scanning electron microscopy (ESEM) were performed on contralateral and osteoarthritic (OA) ovine joint capsule. Biaxial testing was performed on healthy tissue alone. Uniaxial test results showed an increase in stiffness of OA capsule compared to contralateral and a decrease in stiffness as the joint flexed. Collagen fibre orientation of ovine PMC using PLM of contralateral tissue had a symmetrical bimodal distribution oblique to the medial-lateral anatomical axis, while osteoarthritic PMC had a unimodal distribution coincident with the medial-lateral axis. ESEM revealed that OA PMC had statistically significant smaller collagen fibre diameters than contralateral PMC. Biaxial test results showed a trend towards increased stiffness in the proximal-distal axis compared to the medial-lateral axis. Principle stiff-strain orientation yielded a trend of a symmetrical bimodal distribution oblique to the medial-lateral anatomical axis.