A system can include a sizing and drill guide having a body with a bone engaging side, an opposite side and first and second guide holes. The bone engaging side can include a profile for positioning in the trochlear groove and the guide holes can include axes that can be orientated at an acute angle. Retaining members can be positioned in bores formed in the body and can fix the guide to the femur. A cutting device can be guided by the guide holes and can include a bone engaging end having a body and first and second cutting portions. The first cutting portion can have a smaller diameter than the second cutting portion and can be axially spaced apart therefrom so as to form a stepped pocket in the femur. The body can include an outer diameter sized to be complimentary to an inner diameter of the guide holes.
