Purpose Varus alignment is known as one of the major causes of medial compartment osteoarthritis (OA). Medial meniscus extrusion also plays a critical role in the in the development of OA. However, studies on the exact relationship between alignment parameters and medial meniscus extrusion are limited. Therefore, this study aimed to investigate this relationship in patients with knee OA. Methods Based on a retrospective analysis of the outpatient magnetic resonance imaging (MRI) database, 190 knees were identified to be examined using weight-bearing, whole-leg radiographs and MRIs within 3 months from the first consultation. Subsequently, various parameters of lower leg alignment were measured, which affected the knee varus in radiographs. Finally, a statistical analysis was performed to assess the relationships between the OA grade, distance of medial meniscus extrusion (MME), and alignment parameters; hip-knee-ankle angle (HKAA), percentage of mechanical axis (% MA), medial proximal tibial angle (MPTA), and joint line convergence angle (JLCA). The subjects were divided according to the presence or absence of MME (Group A: MME distance below 3 mm, Group B: MME distance 3 mm and above) to assess the differences in each alignment parameter correlated with MME distance between the groups. Results MME distance significantly increased with OA grade progression. HKAA, % MA, MPTA, and JLCA significantly correlated with medial meniscus extrusion distance (r = − 0.21, − 0.23, − 0.16, 0.3, respectively). Multiple regression analysis of each significant alignment combined with age, sex, and body mass index revealed that HKAA, % MA, MPTA, and JLCA were significant independent factors of MME distance (P = 0.008, 0.0026, 0.011, 0.0001, respectively). These significant findings were reinforced in group B. In contrast, the correlation between alignment parameters and medial meniscus extrusion distance was not significant in group A. Conclusion Varus alignment factors are related to MME distance especially in extruded meniscus knees, as the OA grade progressed. Therefore, the coexistence of varus alignment and MME can be the risk factors for OA progression. As the low MPTA was an independent alignment factor for generating varus alignment, patients with osteoarthritis of the knee with both, low MPTA and MME could be the appropriate candidates for early intervention by high tibial osteotomy. Level of evidence III.