We undertook a retrospective analysis of 306 procedures on 233 patients, with a mean age of 12 years (1 to 21), in order to evaluate the use of somatosensory evoked potential (SSEP) monitoring for the early detection of nerve compromise during external fixation procedures for limb lengthening and correction of deformity. Significant SSEP changes were identified during 58 procedures (19%). In 32 instances (10.5%) the changes were transient, and resolved once the surgical cause had been removed. The remaining 26 (8.5%) were analysed in two groups, depending on whether or not corrective action had been performed in response to critical changes in the SSEP recordings. In 16 cases in which no corrective action was taken, 13 (81.2%, 4.2% overall) developed a post-operative neurological deficit, six of which were permanent and seven temporary, persisting for five to 18 months. In the ten procedures in which corrective action was taken, four patients (40%, 1.3% overall) had a temporary (one to eight months) post-operative neuropathy and six had no deficit. After appropriate intervention in response to SSEP changes, the incidence and severity of neurological deficits were significantly reduced, with no cases of permanent neuropathy. SSEP monitoring showed 100% sensitivity and 91% specificity for the detection of nerve injury during external fixation. It is an excellent diagnostic technique for identifying nerve lesions when they are still highly reversible.