This article describes the first case of successful nerve grafting for posterior interosseous nerve (PIN) palsy secondary to radiocapitellar joint entrapment 2 years following closed reduction (CR) of a pediatric Monteggia fracture-dislocation (MFD). Patient notes were examined. The literature was reviewed to determine whether similar cases or techniques had been reported. A 5-year-old girl presented with a PIN palsy 2 years following CR of an MFD, demonstrating Medical Research Council (MRC) grade 4 wrist and MRC grade 2 finger and thumb extension. Nerve exploration at 27 months revealed a PIN crushed in the radiocapitellar joint with a proximal neuroma-in-continuity and no response to electrical stimulation. Neurolysis and lateral antebrachial cutaneous nerve cable grafting were performed. The decision to pursue nerve grafting was based on the intraoperative appearance of an atrophic PIN with no response to stimulation, but with minimal muscle atrophy, short distance to target muscles, and pediatric patient with extended reinnervation timeline. Full recovery (MRC grade 5 wrist extension and MRC grade 4+ finger and thumb extension) was achieved at 1-year follow-up. We present the first case of successful nerve grafting for PIN palsy secondary to radiocapitellar joint entrapment 2 years following CR of a type III MFD. Even with significant treatment delay, nerve reconstruction should be considered in the pediatric population.