The aim of this study was to compare osteotomy for malunited distal radius fracture with embedment of a corticospongious graft into a periosteal flap of the recipient bone (test) with the standard procedure (control) with respect to graft resorption. A retrospective assessor-blind analysis of consecutive patients (test: n = 19, control: n = 30) was performed. Ulnar tilt, palmar tilt and capitate-ulna distance were assessed from radiographs taken before, two to four days after and over three months after the surgery to determine loss of correction achieved by the surgery and estimate graft resorption during the postoperative period. In both unadjusted and adjusted comparisons, loss of correction of all parameters was lower in the test group (P < 0.05). The odds of "none to mild" resorption were greater in the test group with an adjusted odds ratio of 5.43 (95% confidence interval: 1.32-26.5, P = 0.025). Total graft collapse occurred in five of 30 controls and in none of 19 test patients. Graft embedment into the periosteum may improve its preservation.