Joints are located at the meeting of two bones. Each bone end is covered with a smooth layer of cartilage that makes up the joint surface. A joint capsule surrounds the joined ends. The inner lining of this capsule produces fluid that bathes and lubricates the cartilage. Tendon sheaths also contain fluid that lubricates tendons as they passes over or around joints.

Inflammation and injury cause the production of more fluid within these enclosed capsules, resulting in fluid swelling that is well defined. A well defined fluid-filled swelling near a joint is likely to be within a joint or tendon sheath. Whether there is cause for concern depends on many factors. The underlying cause could be minor (aka "windpuffs"). It could also be a sign of a more severe problem with the enclosed tendon.