Vascularized fibular grafts have proved reliable in treatment of bone defects with high success rate. However, severe shortening cannot be primarily corrected by this technique and requires a second stage lengthening procedure. Ilizarov’s method allows correction of shortening and axial malalignment together with the non-union. However, corticotomy of the affected bone may result in delayed consolidation. In addition, the large distraction distance (equals the amount of shortening plus the existing bone defect) requires prolonged frame application which may not be tolerated by the patient. We present a new technique combining vascularized fibular graft and Ilizarov distraction that allows simultaneous correction of shortening while treating the non-union in a single stage operation. This method, avoids corticotomy in the affected bone, and markedly shortens the time of frame application. In this method The proximal part of the fibular graft is then inserted into the medullary canal of the recipient bone for a distance that equals the amount of shortening plus two cm. Ilizarov frame is then applied with one proximal ring above the end pf the doweled fibula and a distal ring with olive wires transfixing the distal end of the fibular graft. Distraction is started after one week at a rate of one mm/day and is stopped when the desired length is achieved leaving two cm of the fibular graft inside the medullary cavity of the recipient bone for later consolidation. Seven cases are presented with an average follow up of 3 years (range 5-one year). Five cases had congenital tibial pseudarthrosis, and two cases had posttraumatic defects of the femur and tibia. Bone defect ranged from 6-15 cm and shortening 5-12 cm. The mean period of frame application was 4-6 months. All grafts united and hypertrophied. Average time to full weightbearing was 6-9 months.