The current authors evaluated a fundamental approach to balancing the lateral ligaments of the knee that begins with aligning the implants correctly in flexion and extension, proceeds to assessing stability in flexion and extension, and concludes with releasing tight structures based on their function throughout the arc of flexion. Seventeen knees from cadavers were used to evaluate stability at various degrees of flexion after total knee arthroplasty, and then stability was reevaluated after release of selected ligaments. The iliotibial band and posterior capsule were effective lateral stabilizers only in full extension. The lateral collateral ligament had a major stabilizing effect throughout the arc from 0 degrees to 90 degrees flexion. The iliotibial band and popliteus tendon and posterolateral corner capsule had little effect when the other ligaments were intact. When tested in the absence of the other lateral ligaments, the popliteus tendon and posterolateral corner capsule had significant stabilizing effects throughout the flexion arc. The popliteus tendon exerted its effect mostly from 60 degrees to 90 degrees flexion. The posterolateral corner capsule was effective mostly at 0 degrees to 30 degrees flexion. The iliotibial band had a significant stabilizing effect from 0 degrees to 30 degrees flexion.