Shoulder contracture from obstetric palsy was surgically released in 24 older children, with simultaneous transfer of the latissimus dorsi and teres major tendons to the posterolateral humerus or rotator cuff. The mean age at surgery was 8 years 11 months. The children were evaluated at a mean follow-up time of 6 years 8 months by the Modified American Shoulder and Elbow Surgeons Form and Shoulder Pain and Disability Index standardized shoulder assessment forms, a questionnaire assessing activities of daily living, and parent and patient satisfaction scales. The fixed internal rotation deformity of 30 degrees +/- 12 degrees improved to 72.5 degrees +/- 27 degrees of external rotation. Improvements of 65 degrees +/- 26 degrees and 47 degrees +/- 33 degrees were seen in abduction and forward elevation, respectively, all without preoperative casting or manipulation. Increased external rotation had a more positive correlation with a higher functional score than abduction. Patients with lower preoperative functional scores had more rotational gain and higher functional scores after surgery. Those aged over 9 years had a functional gain similar to that of the younger children.