Background: In late obstetric brachial plexus palsy (OBPP), restoration of elbow and hand functions is a difficult challenge. The use of free functioning muscle transplantation in late OBPP was very scarcely reported. In this study, we present our experience on the use of free functioning gracilis transfer for restoration of elbow and hand functions in late cases of OBPP. Patients and Methods: Eighteen patients with late OBPP underwent free gracilis transfer for reconstruction of elbow and/or hand functions. The procedure was indicated when there was no evidence of reinnervation on EMG and in the absence of local donors. Average age at surgery was 102.5 months. Patients were evaluated using the British Medical Research Council (MRC) grading system and the Toronto Active Movement Scale. Hand function was evaluated by the Raimondi scoring system. Results: The average follow‐up was 65.8 ± 41.7 months. Contraction of the transferred gracilis started at an average of 4.5 ± 1.03 months. Average range of elbow flexion significantly improved from 30 ± 55.7 to 104 ± 31.6 degrees (P <0.001). Elbow flexion power significantly increased with an average of 3.8 grades (P = 0.000147). Passive elbow range of motion significantly decreased from an average of 147 to 117 degrees (P = 0.003). Active finger flexion significantly improved from 5 ± 8.3 to 63 ± 39.9 degrees (P < 0.001). Finger flexion power significantly increased with an average 2.7 grades (P < 0.001). Only 17% achieved useful hand (grade 3) on Raimondi hand score. Triceps reconstruction resulted in an average of M4 power and 45 degrees elbow extension. Conclusion: Free gracilis transfer may be a useful option for reconstruction of elbow and/or hand functions in late OBPP.