Background: Displaced intra-articular calcaneal fractures can cause angular deformity, chronic foot discomfort, and reduced hindfoot motion. This study aimed to assess the functional outcome of the distraction subtalar arthrodesis in the management of late complications of displaced intra-articular calcaneal fractures. Methods: This prospective interventional cohort study was conducted on 24 patients diagnosed with subtalar arthritis after malunited calcaneal fracture, 20 patients (83.7%) were treated conservatively and 4 patients (16.7%) were treated surgically. The scoring system was based on the hind foot score of the American orthopedic foot and ankle society (AOFAS). Preoperative Radiological examination (X-ray and CT) were done for both affected and normal foot and ankle. Results: Associated injuries were encountered in 6 patients (12.5%). Two had burst fracture of the first lumbar vertebrae that was managed by internal fixation. Another patient had wedge fracture of the eleventh dorsal vertebrae which was treated conservatively and the other last was treated from internal haemorrhage due to rupture of spleen. After a mean period of follow up of 2 years. The outcome of treatment was excellent in 8 patients (16.7%), good and accepted in 36 patients (75%), and it was poor in 4 patients (8.3%). the mean and range of AOFAS score before and after correction and it was found that the mean AOFAS score highly significantly improved after operation, where it increased from 24.8(10-49) before to 73.9(58-90) after operation. Conclusion: Distraction subtalar arthrodesis is associated with high incidence of full improvement in the cases with malunited calcaneal fractures.