Altered gait kinematics and kinetics are observed in patients with medial compartment knee osteoarthritis. Although various kinematic adaptations are proposed to be compensatory mechanisms that unload the knee, the nature of these mechanisms is presently unclear. We hypothesized that an increased toe-out angle during early stance phase of gait shifts load away from the knee medial compartment, quantified as the external adduction moment about the knee. Specifically, we hypothesized that by externally rotating the lower limb anatomy, primarily about the hip joint, toe-out gait alters the lengths of ground reaction force lever arms acting about the knee joint in the frontal and sagittal planes and transforms a portion of knee adduction moment into flexion moment. To test this hypothesis, gait data from 180 subjects diagnosed with medial compartment knee osteoarthritis were examined using two frames of reference. The first frame was attached to the tibia (reporting actual toe-out) and the second frame was attached to the laboratory (simulating no-toe-out). Four measures were compared within subjects in both frames of reference: the lengths of ground reaction force lever arms acting about the knee joint in the frontal and sagittal planes, and the adduction and flexion components of the external knee moment. The mean toe-out angle was 11.4 degrees (S.D. 7.8 degrees , range -2.2 degrees to 28.4 degrees ). Toe-out resulted in significant reductions in the frontal plane lever arm (-6.7%) and the adduction moment (-11.7%) in early stance phase when compared to the simulated no-toe-out values. These reductions were coincident with significant increases in the sagittal plane lever arm (+33.7%) and flexion moment (+25.0%). Peak adduction lever arm and moment were also reduced significantly in late stance phase (by -22.9% and -34.4%, respectively) without a corresponding increase in sagittal plane lever arm or flexion moment. These results indicate that toe-out gait in patients with medial compartment knee osteoarthritis transforms a portion of the adduction moment into flexion moment in early stance phase, suggesting that load is partially shifted away from the medial compartment to other structures.