Purpose: To evaluate the integrity of lateral soft tissue in varus osteoarthritis knee by comparing the mechanical axis under varus stress during navigation-assisted total knee arthroplasty before and after compensating for a bone defect with the implant. Methods: Sixty-six knees that underwent total knee arthroplasty were investigated. The mechanical axis of the operated knee was evaluated under manual varus stress immediately after knee exposure and after navigation-assisted implantation. The correlation between each value of the mechanical axis and degree of preoperative varus deformity was compared by regression analysis. Results: The maximum mechanical axis under varus stress immediately after knee exposure increased in proportion to the degree of preoperative varus deformity. Moreover, the maximum mechanical axis under varus stress after implantation increased in proportion to the degree of preoperative varus deformity. Therefore, the severity of varus knee deformity leads to a progressive laxity of the lateral soft tissue. However, regression coefficients after implantation were much smaller than those measured immediately after knee exposure (0.99 vs 0.20). Based on the results of the regression formula, the postoperative laxity of the lateral soft tissue was negligible, provided that an appropriate thickness of the implant was compensated for the bone and cartilage defect in the medial compartment without changing the joint line. Conclusion: The severity of varus knee deformity leads to a progressive laxity of the lateral soft tissue. However, even if the degree of preoperative varus deformity is severe, most cases may not require additional procedures to address the residual lateral laxity.