To study how a femoral osteotomy alters the natural evolution of Perthes' disease, records and radiographs of 640 patients with Perthes' disease were analyzed. The data of 314 patients who underwent femoral osteotomy were compared with those of non-operated patients. A new modification of classification of the stages of evolution of the disease was used to identify the timing of surgery and to monitor the progress of the disease following surgery. The duration of each stage of the disease, the extent of epiphyseal extrusion, the extent of widening of the femoral metaphysis and the dimensions of the acetabulum were noted on sequential radiographs. The changes in the femoral epiphysis and metaphysis and changes in the acetabulum were also noted. It was observed that a varus osteotomy clearly alters the natural evolution of Perthes' disease. Of patients who were operated in the stage of avascular necrosis, 34% bypassed the stage of fragmentation. The duration of the disease was shorter in these patients. The duration of the stage of fragmentation was reduced in operated children who passed through the stage of fragmentation. The extent of femoral head extrusion was minimized at the stage when it was most vulnerable for deformation. Metaphyseal widening and subsequent femoral head enlargement were also minimized in children who underwent a femoral osteotomy. The chances of retaining the sphericity of the femoral head were much higher in those children who had a femoral osteotomy. These beneficial effects of a varus osteotomy, were most evident when the operation was performed either in the stage of avascular necrosis or in the early stage of fragmentation.