Background Administration of tranexamic acid topically and intravenously has demonstrated effectiveness in decreasing blood loss and transfusion rates. Methods We randomized 131 patients undergoing primary total knee arthroplasty to receive either intracapsular (69) or intravenous tranexamic acid (62). Postoperative blood loss was calculated using the formula derived by Nadler et al. The number of units transfused was recorded, as well as length of hospital stay. Results We found no statistically significant difference on calculated blood loss (postoperative day [POD] 1: 624 ± 326 vs 644 ± 292; P = .71, POD 2: 806 ± 368 vs 835 ± 319; P = .64, and POD 3: 1076 ± 419 vs 978 ± 343; P = .55). There was no difference in number of blood transfusions, length of stay, or complications. Conclusion Intracapsular tranexamic acid is not inferior to intravenous tranexamic acid in decreasing blood loss and blood transfusion rate in primary total knee arthroplasty.