A review of 119 patients with congenital dislocation of the hip complicated by avascular necrosis, of whom fifty-one patients were skeletally mature, showed that damage to the physis was very common. Changes in the secondary ossification center (ossific nucleus) alone were found to be of very little value in predicting the nature of the development of the hip, while the change in the proximal femoral physis was the key to predicting residual deformity. The vascular disturbances were classified into four groups depending on the amount of damage involving the ossific nucleus and the physis during treatment of the dislocation. This classification was found to be accurate in predicting the natural history of avascular necrosis. The more severe forms of avascular necrosis were found to be most prevalent in those patients in whom treatment was begun between birth and the age of six months. We also found that preliminary traction and the use of general anesthesia reduced the incidence of the more severe form of avascular necrosis. The functional results found in the skeletally mature patients coincided with the types of vascular changes; the presence of avascular necrosis enhanced the development of arthritis, especially if residual dysplasia and subluxation also were present.