Knee ligament injuries are common, particularly in sports and sports related activities. Rupture of these ligaments upsets the balance between knee mobility and stability, resulting in abnormal knee kinematics and damage to other tissues in and around the joint that lead to morbidity and pain. During the past three decades, significant advances have been made in characterizing the biomechanical and biochemical properties of knee ligaments as an individual component as well as their contribution to joint function. Further, significant knowledge on the healing process and replacement of ligaments after rupture have helped to evaluate the effectiveness of various treatment procedures. This review paper provides an overview of the current biological and biomechanical knowledge on normal knee ligaments, as well as ligament healing and reconstruction following injury. Further, it deals with new and exciting functional tissue engineering approaches (ex. growth factors, gene transfer and gene therapy, cell therapy, mechanical factors, and the use of scaffolding materials) aimed at improving the healing of ligaments as well as the interface between a replacement graft and bone. In addition, it explores the anatomical, biological and functional perspectives of current reconstruction procedures. Through the utilization of robotics technology and computational modeling, there is a better understanding of the kinematics of the knee and the in situ forces in knee ligaments and replacement grafts. The research summarized here is multidisciplinary and cutting edge that will ultimately help improve the treatment of ligament injuries. The material presented should serve as an inspiration to future investigators.