A minimally invasive tissue incision system for creating joint capsulotomies and releasing/incising various tissues, tendons, and fibrous band structures is described. The system contains a penetrating needle which is retractable so as to expose a cutting element, and which may be used as a penetrating needle to pierce the skin and other soft tissue structures. The cutting clement provided within the penetrating needle may be used to incise subsequent tissue structures after the initial penetration. The system facilitates such procedures by providing the cutting element with the confines of the needle which provides safe introduction of the cutting element directly to the site via the needle.
