An internal rotation contracture is a common complication of obstetric brachial plexus palsy. We describe the operative treatment of seven children with a recurrent internal rotation contracture of the shoulder following earlier corrective surgery which included subscapularis slide and latissimus dorsi transfer. We performed z-lengthening of the tendon of the subscapularis muscle and transferred the lower trapezius muscle to the infraspinatus tendon. Two years postoperatively the mean gain in active external rotation was 47.1°, which increased to 54.3° at four years. Lengthening of the tendon of subcapularis and lower trapezius transfer to infraspinatus improved the range of active external rotation in patients who had previously had surgery for an internal rotation contracture.