Posterior dislocation is an uncommon complication of total knee arthroplasty (TKA) using a posterior stabilized total knee prosthesis, and it usually results from flexion instability. Acute posterior dislocation of a posterior stabilized prosthesis complicated by compartment syndrome of the leg has not previously been reported in the literature. We report a 62-year-old woman with posterior dislocation of her posterior stabilized TKA when her knee was in extension. It was further complicated by compartment syndrome with severe muscle necrosis. The diagnosis of compartment syndrome was delayed, partly because of continuous epidural anesthesia that completely abolished the pain and partly because of the low index of suspicion, as compartment syndrome is not well recognized as a possible complication of TKA. This case report strongly emphasizes that continuous epidural anesthesia is contraindicated in the case of complicated TKA because important clinical cues to neurovascular complications could be masked.