Avascular necrosis of the lunate, first described by Kienbock, can be treated either conservatively or by various surgical procedures. We compared the results of 18 conservatively treated patients, all of whom had stage-2 or stage-3 disease, with those of 15 who underwent a radial shortening procedure. We evaluated pain, range of movement, grip strength and functional disability, and determined the progression of the disease by assessing radiologically carpal height, the width and flattening of the lunate, the radioscaphoid angle, the pattern of the fracture and sclerosis and cysts. The mean follow-up was for 3.6 years (1.5 to 9). Patients treated by radial shortening had less pain and better grip strength than those managed conservatively. In some patients with stage-3 disease treated conservatively there was rapid deterioration to carpal collapse. Although radial shortening did not reverse or prevent carpal collapse, it slowed down the process in patients with stage-3 disease. We recommend a radial shortening procedure for patients with severe pain and radiological signs of progressive carpal collapse.