This is a prospective study done on 27 hips in 25 patients presented with Perthes’ disease between December 1999 and August 2002. Fourteen hips were treated operatively by mean of upper femoral osteotomy (group A), and the other remaining 13 hips were treated conservatively by mean of Scottish Rite abduction brace (group B). All hips were classified preoperatively as Catterall group III and IV, furthermore, two or more “head at risk signs” were seen in all hips with particular emphasis placed on lateral uncovering of the femoral head. Of the 25 patients, 20 (80%) were boys and 5 (20%) were girls, the left side was affected in 18 hips (66.7%), while the right side was involved in 9 hips (33.3%), two patients had bilateral involvement and were encountered in group A. The average time between onset of symptoms and time of treatment for group A and groups B was 9 months and 8.5 months respectively, while the mean duration of follow up was 2.2 years and 1.8 years respectively. It was concluded that group A showed better results than B regarding hip pain (100% vs 15.4%), hip motion (85.7% vs 7.6%), gait (28.5% vs 7.6%), limb-length discrepancies (93.6% vs 30.7%) and centre-edge angle (100% vs 15.4%). Femoral varus derotation osteotomy was found to be the treatment of choice for containment of Perthes’ disease with Catterall group III and IV. Both age and sex at the time of the treatment, influences the final outcome, however, longer period of follow-up may allow better final evaluation