Postoperative Cognitive Dysfunction (POCD) is a common complication of central nervous system in postoperative anesthesia. The paper was to study the effect of two anesthesia methods on POCD in elderly orthopedic patients. Sixty-five elderly orthopedic patients underwent elective single knee arthroplasty were randomly divided into two groups. Inhalation anesthesia combined with nerve block was performed in observation group, and inhalation anesthesia was performed in control group. Mean Arterial Pressure (MAP), Mini Mental State Examination (MMSE) score, postoperative pain score (Visual Analogue Scale (VAS)) and adverse reactions at different time points after anesthesia were evaluated in POCD of elderly orthopedic patients. The MAP of T1, T2, T4 in observation group was significantly lower than control group, while MAP of T3 in observation group was significantly higher than control group (P<0.05). In the observation group, MMSE scores were significantly higher than those in control group at 6, 12 and 24 h after anesthesia (P<0.01). The incidence of POCD in the two groups was statistically significant (P<0.05). The incidence of adverse reactions such as dizziness, nausea and vomiting, respiratory depression and hypertension in observation group were significantly less than control group (P<0.05) within 24 h. The VAS score of observation group were significantly lower than control group (P<0.05) at 6, 12 and 24 h after surgery. In elderly patients with single knee arthroplasty, compared with simple inhalation general anesthesia, inhalation anesthesia combined with nerve block reduced the impact of physiological indexes in perioperative period. Furthermore, it indicated that inhalation anesthesia combined with nerve block improved POCD.