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Introduction: Slight lateral laxity exists in normal knee especially in flexion. The lateral laxity in flexion has possibility to affect the outcome after total knee arthroplasty (TKA). Purpose: The purpose of this study was to determine how intraoperative laxity in flexion affects patient-reported outcome after total knee arthroplasty. Methods: We retrospectively analysed 98 knees with osteoarthritis that underwent total knee arthroplasty. After bone resection, ligament imbalance and joint component gaps were measured using an offset-type tensor while applying a 40-lb joint distraction force at 0° and 90° of knee flexion. The lateral laxity in flexion was determined by subtracting polyethylene insert thickness from the lateral gap at 90°. All patients were divided into three groups: ≤ 2 mm (A), 2–5 mm (B), and > 5 mm (C). One year after surgery, patients were asked to fill out questionnaires using the new Knee Society Score after examination outside the consultation room. Results: The mean intraoperative lateral laxities at 90° were − 0.2 ± 2.1 mm, 3.5 ± 0.7 mm, and 6.7 ± 1.9 mm in groups A, B, and C, respectively. The symptom score of group C was significantly lower than those of groups A or B. There were no significant differences in terms of satisfaction or the expectation and activity scores among all groups. There were no significant differences in terms of alignment after total knee arthroplasty among all groups. Conclusions: Excessive lateral laxity possibly resulted in worse patient-reported outcomes. However, slight lateral laxity of 2–5 mm might have no effect on patient-reported outcome and this slight varus imbalance could be acceptable. Altogether, our findings would lead to avoidance of excessive medial release in soft tissue balancing.