A retrospective review of displaced extension-type supracondylar fractures of the humerus in 101 children who were seen consecutively revealed eighteen associated neural injuries in thirteen children. Nine of the neural injuries in eight patients spontaneously resolved at a mean of 2.5 months (range, 1.5 to five months) after injury. The remaining nine lesions in five patients were explored at a mean of 7.5 months (range, five to fourteen months) after injury, because clinical and electromyographic studies showed no return of function. Neurolysis was performed on eight of the nerves that were explored (in five patients), and the remaining radial nerve was found to be completely lacerated and needed nerve-grafting. The length of follow-up after neurolysis averaged twenty-five months (range, thirteen to forty-four months). All five patients had functional recovery, as documented by range-of-motion, grip-strength and lateral pinch-strength, and von Frey and two-point-discrimination sensory testing. The patient who had had nerve-grafting never recovered neural function, and tendon transfers were needed. We concluded that observation and supportive therapy is the preferred initial approach for children who have a neural injury associated with a closed, displaced supracondylar fracture of the humerus. However, if there is no clinical or electromyographic evidence of return of neural function at five months after injury, exploration and neurolysis should be performed. If the nerve is in continuity, the prognosis after neurolysis is excellent.