Abstract: A slitter knife system and method, wherein temporary application of air pressure is utilized to facilitate removal of a slitting knife from a slitting knife assembly. The present invention comprises a rotary spindle shaft assembly from which extends a mechanically-coupled spring-loaded piston. A slitting knife is maintained upon the spindle shaft assembly, and around the piston, via cooperative engagement of a retaining cap over the piston, wherein the compressive spring forces associated with the piston lock the retaining cap therewith. The spindle shaft assembly further comprises an air channel that extends to the rear of the piston, wherein a momentary application of air pressure through the air channel overcomes the compressive spring forces associated with the piston and, thus, urges the piston upward; thereby, enabling removal of the retaining cap therefrom, and access to the damaged or dulled slitting knife for replacement of same.