A removable, resilient atraumatic sheath for arthroscopic instruments. The sheath covers sharp edges on the arthroscopic instrument, particularly the distal tip of the rigid cannula, and thereby protects tissue and objects near a surgical site from accidental trauma. The sheath may be provided in the form of an inflow/outflow sheath that allows a surgeon to irrigate and drain a surgical field without the use of a separate irrigation instrument. The sheath is provided with a cylindrical grip on the proximal end to resiliently squeeze the proximal end of the arthroscopic instrument. A lever is provided to move the grip radially outwardly to release the grip from the arthroscopic instrument.