Distal femoral varization osteotomy is performed for treatment of lateral compartment osteoarthritis of the knee associated with valgus deformity for relief of pain and improvement of functional status. Careful selection of patients is the key to the success of this procedure. Distal femoral varus osteotomy is indicated for patients with isolated lateral compartment knee arthritis with a valgus deformity; candidates must have a range of motion arc of at least 90 degrees and less than 20 degrees of flexion-contracture. The indications of distal femoral varization osteotomy must be considered before surgery. Contraindications include patients with diffuse and nonspecific knee pain, primary complaint of patellofemoral pain, history of medial meniscectomy, and bicompartmental degeneratvie osteoarthritis. The success of an osteotomy is dependent on adequate correction of limb malalignment; therefore, accurate determination of the desired angle of correction is essential during preoperative planning. In recent years with the advent of new anatomical locking plate designs, medial closed wedge osteotomy has become popular. Compared to lateral opening wedge osteotomy, with medial closing wedge osteotomy, earlier union is expected and it provides stable fixation even with poor bone quality. Nevertheless, arthroplasty offers rapid pain relief and short-term rehabilitation period; however, risk of wear, difficulty and poor outcome of revision surgery, possible complication of infection or prosthetic failure in young and active patients, demanding high functional loading, is a cause for concern. Because this joint preserving procedure is not associated with prosthesis-related complication, it can be a good alternative option for young and active patients.