Four fresh-frozen anatomic knee specimens were tested for knee stability, patellar tracking, and patellofemoral contact points with the femoral component positioned in 5 degrees internal, 5 degrees external, or neutral axial rotational alignment of the femoral component referenced on the posterior femoral condyles. The externally rotated specimens had varus-valgus stability of the knee that was closest to the normal control. The internally rotated specimens shifted into valgus alignment with flexion. Patellar tracking also was closest to normal in the externally rotated specimens. Patellofemoral contact was more evenly distributed between the medial and lateral contact areas in the externally rotated specimens than in the internally rotated or in the neutral specimens. Internal rotation of the femoral component in the knee with perpendicular resection of the tibia causes undesirable changes in knee stability, patellar tracking, and patellofemoral contact points. Neutral positioning produces similar but less negative effects on knee stability and patellar kinematics. External rotation improves both patellar tracking and knee stability characteristics.