Baker's Cysts usually develop due to a problem in the knee that causes joint fluid to accumulate in the joint. This collection of fluid causes pressure to build. When the pressure in the joint is high enough, fluid is forced backwards to form a cyst behind the knee. The anatomy of the knee "traps" the fluid behind the knee; the fluid cannot easily return to the joint.
Eventually, the cyst can become large enough to restrict movement of the knee or cause pain. It can also block the flow of blood through veins behind the knee, causing the lower leg to swell. This can mimic a blood clot in a leg vein. A Baker's Cyst can also rupture, spilling fluid into the calf. This is also a cause of leg swelling that can mimic a blood clot.