Background: Although free functioning muscle transfer can significantly enhance the function of the damaged upper extremity in cases of Volkmann's ischemic contracture (VIC), normal-functioning of the affected limb is not to be expected in the long-term. Objective: To evaluate the results of using functioning free gracilis transfer for restoration of hand and wrist function in severe Volkman's ischemic contracture in children. Subjects and Methods: In prospective interventional research that was carried out on twenty-four patients at the Hand and Reconstructive Microsurgery Unit, Assiut University Hospital (23 patients) and Department of Orthopedic Surgery Zagazig university hospitals (1 patient), free functioning gracilis muscle transfer was used for managing severe Volkman's ischemic contracture of the forearm in children. Results: functional free muscle transfer (FFMT) proved to enhance post-operative passive range of movement (ROM), active ROM, active fingertip to palm crease, active thumb to palm crease and thumb opposition. Also, it improved power grade, pinch power and hand sensation. The earlier intervention resulted in better passive ROM. Functioning intrinsic muscles preoperatively gave better results as regard active ROM. Conclusion: FFMT is the best solution in cases of severe VIC even if the best results can't be achieved.