An arthroscopic cutting probe includes an outer sleeve having a longitudinal bore and an outer cutting window at its distal end. An inner sleeve is rotationally disposed in a bore of the outer sleeve, and the inner sleeve has a distal end, a proximal end, a longitudinal passageway, and an inner cutting window at its distal. An active electrode sleeve is disposed on an outer surface of the inner sleeve in a position opposed to the inner cutting window. Rotation of the inner sleeve relative to the outer sleeve causes the inner cutting window to rotate past the outer cutting window to resect tissue received through the cutting windows as they pass each other. Radiofrequency current can be applied to the active electrode to enhance tissue cutting then the cutting windows are being rotated or to able or cauterize tissue when the cutting windows are held stationary with the active electrode disposed through the outer cutting window.