We assessed the outcomes in 24 of 25 children (mean age 3 years) who had soft-tissue shoulder reconstruction procedures for obstetric brachial plexus injuries. All had latissimus dorsi and teres major transfers to strengthen external rotation combined with subscapularis lengthening, reduction of posterior dislocation or subluxation, and humeral osteotomy, if necessary. At a mean follow-up of 3.8 years, the mean Mallet score improved from 12.3 preoperatively to 17.4 postoperatively, active external rotation improved from 21° to 32°, and passive external rotation improved from 26° to 67°. The shoulder remained in joint in all patients. Active internal rotation deteriorated in nine shoulders, two requiring secondary internal rotation osteotomy. Combined soft tissue rebalancing and bony procedures gives reliable shoulder function improvement. Care is required regarding the effect on internal rotation.