This case report highlights a rare complication of arthroscopic meniscal tear which is an arteriovenous fistula and pseudoaneurysm of the superior medial geniculate artery. A 14-year-old male patient presented with persistent hemarthrosis following arthroscopic repair of a bucket handle medial meniscal tear. The patient was investigated due to suspicion of vascular damage. After obtaining computed tomography (CT) arteriogram, the patient was diagnosed with an arteriovenous fistula and pseudoaneurysm of the superior medial geniculate artery. Conservative management was pursued following consultation with cardiovascular surgery. At three months, the arteriovenous fistula was observed to be in remission. In conclusion, orthopedic surgeons performing knee arthroscopy should be vigilant about potential vascular complications, although rare, and consider early diagnosis and treatment in cases of persistent postoperative hemarthrosis.