Pain in your knees is most commonly caused by:
• Incorrect seat height
• Foot rotation on the pedal (only if you have clipless pedals)

For foot rotation, you need to adjust your cleats on the bottom of your shoes to match your normal walking foot position. Here’s how:
Walk across the floor, and look at the orientation of your feet. They will be “toe in”, “toe out” or “perfectly straight”. You need to adjust your cleats on the bottom of your shoes so that when you are “clipped in” your feet are in the same position as when you are walking, and the ball (widest part of your foot) should be directly over or slightly behind the axle of the pedal. Example: “Bob” walks with his left foot “toe out” (counter clockwise 2° - the heal of his shoe is ½" to the right of his toes). So that he is not putting stress on his knee, he will need to adjust the cleat so that when clipped into the pedals, his shoe will be “toe out”. To adjust a cleat “toe out” (counter clockwise), turn it counter clockwise while the shoe is cleat side up.

Note: Keep in mind that a seat that is even slightly mis-adjusted can cause knee, leg and Achilles injuries, so even if you are not having pain, I would suggest going to your local bicycle shop and having your bike professionally fitted. A fitting should come free with the purchase of a bike, and should include adjustment of your shoes, seat and handle bar.