Brief Answer:
Entrapment of sensory branch of saphenous nerve

Detailed Answer:
There are a number of potential causes for the symptom of NUMBNESS in any part of the body, however, for the specific location that you mention which is ABOVE the knee there is a small group of nerve branches that comprise what is called the INFRAPATELLAR NERVE and this is a branch of a larger nerve called the SAPHENOUS nerve that gives this branch off about mid thigh to give sensation to the interior portion of the knee. If your numbness is more to the outer quadrant of the knee then, perhaps it's the terminal cutaneous branches of the lateral femoral cutaneous group of nerves.

More commonly though the infrapatellar nerve seems to be the one that becomes irritated by entrapment of tissues and ligament that make up the kneecap (patella) as well as the support of the knee (medial and lateral collateral ligaments). Sometimes calcifications or other physical phenomenon can entrap small twigs of this group of nerves. Take a look at the diagram of the infrapatellar nerve and how it fans out over the kneecap and I'm sure you can imagine how something can get "stuck" or entrapped which would then, cause symptoms of NUMBNESS, etc. Here's the link for a good visual:

https://upload.wikimedia.org/wikipedia/commons/4/43/Gray835.png

Other possible explanations for your symptom could invoke more direct pathologies of the knee itself such as swelling, INTRA-articular (within the joint) pathologies such as rheumatoid arthritis, or gout, etc. However, since your primary symptom is that of NUMBNESS and you didn't really say much about PAIN...my vote would still be for some type of more minor problem having to do with the nerves that encircle the knee (either the infrapatellar or the lateral femoral cutaneous or even the anterior cutaneous femoral nerve...depending on which side you're referring is numb).

In order to know exactly what is happening you should be examined by a neurologist who can map out the exact territory of sensory deficits and make sure that no motor components are actually involved. The next step may also be to perform some blood work, imaging studies, or some electrical testing in the area....though, in my opinion I don't think the electrical study will show much since these nerves are very small and they cover such a small area of distribution that something like a needle study that is only looking for sensory nerve potentials is not terribly SENSITIVE and the test may likely come out negative for any problem. That certainly would not go together with what you feel and so I don't see it as a high yield test.

I would stick with blood work, imaging study, and then, see what the doctor recommends for treatment. Often times, if there is an entrapment then, some well designed stretching or gliding exercises of the muscles and tendons can be helpful and disengage any of the "stuck" branches that could be causing the problem. Other times, a more rigorous program of exercise and massage can do the trick. And then, there are times when none of these modalities will work.

Be careful if offered any type of "surgery"....even something as simple as arthroscopy unless imaging studies absolutely reveal some type of meniscal pathology or intra-articular pathology which can be easily and definitively repaired likely to get rid of the symptom. Often times surgery itself will INCREASE the amount of numbness and tingling since the simple act of cutting through the skin and other tissues is already going to necessarily compromise even smaller nerves than the ones you see in the picture and these are nothing that the surgeon can even see. Therefore, I also counsel patients to expect some degree of numbness/tingling/pain to come about as a result of surgery and to weigh the risks and benefits of such a procedure if what they are really trying to fix a small patch of numbness in a body area that is not considered "critical" to functioning or survival. Make sense?

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