Objective To compare effectiveness between sequestrum clearance and impacting bone graft and rotational osteotomy on the base of femoral neck via surgical hip dislocation approach for avascular necrosis of femoral head (ANFH) at Association Research Circulation Osseous (ARCO ) stage Ⅲ. Methods A clinical data of 24 patients (27 hips) with ANFH at ARCO stage Ⅲ, who met the inclusion criteria between June 2012 and November 2017, was retrospectively analysed. Of all patients, 12 patients (14 hips) were treated with sequestrum clearance and impacting bone graft via surgical hip dislocation approach (group A); and 12 patients (13 hips) were treated with rotational osteotomy on the base of femoral neck via surgical hip dislocation approach (group B). There was no significant difference in gender, age, disease duration, and affected side, type, and stage of the ANFH between 2 groups (P>0.05). The operation time of each hip and hospitalization stays of each patient in 2 groups were recorded and compared. Imaging examination was performed to observe the blood supply around femoral head, healing of the osteotomy, and the femoral head collapsed. The function of the hip was evaluated by Harris score. Results There was no significant difference in operation time and hospitalization stays (t=–0.262, P=0.797; t=–0.918, P=0.411). All patients were followed up, the follow-up time of group A was 12-28 months (mean, 19.7 months), and the follow-up time of group B was 14-24 months (mean, 17.8 months). The Harris score in groups A and B increased significantly at 6 months and 12 months after operation when compared with preoperative ones (P<0.05). There was no significant difference between 2 groups at 6 months and 12 months (P>0.05). At 12 months after operation, according to the Harris scoring, there were 3 hips of excellent, 7 hips of good, and 4 hips of poor, with the excellent and good rate of 71.4% in group A; there were 5 hips of excellent, 7 hips of good, and 1 hip of poor, with the excellent and good rate of 92.3% in group B. Digital substraction angiography was performed at 1 week after operation and indicated that the blood supply around the femoral head was not destroyed during the operation. Imaging examination after operation showed that the osteotomy of the greater trochanter all healed in 2 groups and the osteotomy of the femoral neck healed in group B. Hip collapse occurred in 2 patients (2 hips) of group A at 12 months after operation. No hip collapse occurred in group B. Conclusion The rotational osteotomy on the base of femoral neck via surgical hip dislocation approach is superior to sequestrum clearance and impacting bone graft in delaying the collapse and improving the hip function for patients with ANFH at ARCO stage Ⅲ.