Background: Internal rotation deformity due to brachial plexus birth palsy frequently lead to glenohumeral deformity . Our surgical approach to treat these contractures relies on arthroscopic release and tendon transfer of latissimus dorsi muscle for young children . We report the results for twenty children followed for a minimum of two years after such treatment Patients and methods: This study was done in the Orthopedic department, Sohag University Hospitals including all patients with brachial plexus birth palsy with internal rotation contracure of the shoulder. Twenty children with a mean age of 4 years (between 2 and 6 years old) underwent arthroscopic contracture release and tendon transfer of latissimus dorsi muscle as a primary procedure.Passive and active external rotation, internal rotation, and elevation were measured for all patients pre and postoperatively. Modified mallet score and active movement score was measured pre and postoperatively. Magnetic resonance imaging was performed preoperatively and postoperatively to evaluate glenoid version and head sublaxation. Results: At the time of follow-up, the mean passive external rotation was increased by 67° (p < 0.005) in the children with a successful arthroscopic release and tendon transfer. The mean active elevation increased by 12°. Internal rotation was not measured consistently preoperatively, but when it had been it was found to have decreased substantially postoperatively. Mean glenoid version improved from -33° to -7° following soft-tissue releases and The percentage of the humeral head anterior to the middle of the glenoid improved from 8% to 43%. While the average duration of clinical and radiographic follow-up was twenty-four months, improvements in both shoulder motion and glenohumeral joint morphology were seen early and were maintained during the follow up period. Conclusion: In children with internal rotation contracture, arthroscopic release and tendon transfer effectively restores nearly normal passive external rotation and a centered glenohumeral joint at the time of surgery. In most of these children, external rotation strength is sufficient to maintain this range of motion and to improve glenoid development when preoperative deformity was present. Improvement in active elevation was minimal. All children have a loss of internal rotation, which is moderate in most of them.