The objective of this study was to compare a newly developed fat-saturated intermediate-weighted (IM-w) 3D fast spin-echo (FSE) sequence with standard 2D IM-w FSE sequences regarding image quality and diagnostic performance in assessing abnormal findings of the knee. MR imaging was performed at 3.0 T in 50 patients. Images were assessed independently by three radiologists. Image quality was rated significantly higher (p < 0.05) for the 2D versus the 3D FSE sequences. Sensitivity for cartilage lesions was slightly higher for the 3D sequence, but specificity was lower. Low contrast objects were better visualized with 2D sequences, while high contrast objects were better shown with the 3D sequence. Confidence scores were higher for 2D than for 3D sequences, but differences were not significant. In conclusion, isotropic 3D FSE IM-w imaging may enhance standard knee MRI by increased visualization of high contrast lesions; however, 3D FSE image quality was lower.