A method of preparing a knee joint for receiving a unicondylar knee implant includes preparing a first seating surface at a proximal end of a tibia, and providing a combination bur template and spacer block, the bur template having an upper end, a lower end and a curved surface extending between the upper and lower ends thereof that is adapted to conform to a femoral condyle of a femur and the spacer block extending from the lower end of the bur template and having top and bottom surfaces. The method includes flexing the knee joint so that the prepared first seating surface at the proximal end of the tibia opposes a posterior region of the femoral condyle and inserting the combination bur template and spacer block into the knee joint so that the top surface of the spacer block engages the posterior region of the femoral condyle and the bottom surface of the spacer block engages the first seating surface at the proximal end of the tibia. While the spacer block is maintained between the femur and the tibia, the knee joint is extended until the curved surface of the bur template engages the femoral condyle of the femur. The bur template is anchored to the femur and used to guide burring of the femoral condyle for preparing a second seating surface on the femur. After burring the distal end of the femoral condyle, the posterior region of the femoral condyle is resected.