Background It has been over 100 years since the initial description of avascular necrosis of the lunate. Over the last two decades, there has been the introduction of advanced information regarding the etiology, natural history, classification, and treatment options for lunate osteonecrosis. There have been new classifications developed based on advanced imaging, perfusion studies of lunate viability, and arthroscopic assessment of the articular cartilage. Purpose This article brings together a new treatment algorithm, incorporating the traditional osseous classification system (Lichtman) with the perfusion/viability classification (Schmitt) and the articular cartilage classification (Bain). Methods We have developed a new algorithm to manage Kienböck avascular necrosis of the lunate. This new algorithm incorporates the current concepts of the diseased lunate and its effects on the remainder of the wrist. Conclusion For patients with a good prognosis and in the earliest stages, the "intact lunate" is initially protected utilizing nonoperative measures. If this fails, then appropriate lunate unloading procedures should be considered. If the lunate is "compromised" then it can be reconstructed with a medial femoral condyle graft or proximal row carpectomy (PRC). With the further collapse of the lunate, the wrist is then also compromised, with the development of secondary degeneration of the central column articulation. The "compromised wrist" will have functional articulations, which allows motion-preserving procedures to be utilized to maintain a functional wrist. With advanced disease (Kienböck disease advanced collapse), the wrist is not reconstructable, so only a salvage procedure can be performed. Other than these objective pathoanatomical factors, the final decision must accommodate the various patient factors (e.g., age, general health, lifestyle, financial constraints, and future demands on the wrist) and surgeon factors (skill set, equipment, and work environment).