Tibial tray malalignment has been associated with increased subsidence and failure. We constructed a finite element model of knee arthroplasty to determine the biomechanical factors involved in increasing the risk of subsidence with malalignment. Four fresh-frozen human knees were implanted with a tibial tray and subjected to forces representative of walking for up to 100,000 cycles. Cyclic displacement was measured between the tray and proximal tibia. The vertical load was shifted medially to generate a load distribution ratio of 55:45 (medial/lateral) to represent neutral alignment or 75:25 to represent varus alignment. Subjected specific geometry and material properties were obtained from qCT scans of tibia to construct a finite element model. The tray was subjected to a single load cycle representing experimental conditions. Tray displacement computed by the model matched that measured experimentally. Forces representing varus tray alignment generated greater strains in the proximal tibia and a greater volume of bone was subjected to strains higher than the fatigue threshold. Local compressive strains directly correlated with experimental subsidence and failure. Our results indicate that failure after tray malalignment is likely due to fatigue damage to the proximal tibia rather than shear across the implant-bone interface or failure of the cement mantle.