In this prospective study of 19 consecutive children, the operative treatment of internal rotation contracture of the shoulder in obstetric brachial plexus lesions by subscapular tendon lengthening and open reduction of the humeral head is evaluated. The average age of the children was 3.7 years and average follow-up was 20 months. Active shoulder function, as measured by the Mallet score, improved significantly in the dimensions of external rotation, hand-mouth movement and hand-neck movement. However, eight of the 19 children developed a severe, functionally disturbing external rotation contracture of the shoulder. This contracture was found predominantly in children who had a lower preoperative Mallet score for abduction and hand-back movement.