Eprospective study undertaken between January 2007 and January 2011, 58 consecutive cases with compound tibial shaft fractures. All fractures were stabilized by external fixator device AO/ASIF type after failed the manipulation under anesthesia (MUA) to restore the osseous alignment. In 32 patients cancellous bone graft were used from the upper part of the tibia to enhance healing process, all these patients were followed for an average of 8–12 months. Our findings showed that stabilization of the fracture shaft tibia by external fixation with cancellous bone graft had significantly better result, than external fixation alone. We conclude that unilateral, uniplanar external fixation with early bone grafting from upper part of the tibia is considered the best method of management for unstable tibial shaft fracture in our community. The frame offered sufficient stability even in segmental fractures; application time is very short in the hands of the experienced surgeon. dynamization of the fixator must not be forgotten, and lastly we recommended that the external fixation is not only used as temporary form of immobilization but can be used as a definitive stabilizing procedure until consolidation of the fracture. It is safe, effective, cheap and available in almost all orthopedics units in Iraq.