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A case report is presented of a 65-year-old diabetic woman with an 18-month history of a penetrating ulcer of the plantar aspect of the first metatarsal head with associated sepsis of the first metatarsophalangeal joint and adjacent underlying osteomyelitis. Salvage of the first metatarsophalangeal joint was performed through aggressive soft-tissue and osseous debridement, external fixation with antibiotic-loaded polymethyl methacrylate bone cement, and delayed interpositional autogenous iliac crest bone graft arthrodesis. Osseous incorporation of the interposed bone graft occurred 12 weeks postoperatively. No soft-tissue or osseous complications occurred during the postoperative period, and at 1-year follow-up there was no evidence of ulceration recurrence, transfer ulceration, shoe-fit problems, or gait abnormalities. A detailed review of the literature on the use of external fixation and interpositional bone graft distraction arthrodesis of the first metatarsophalangeal joint is presented. (J Am Podiatr Med Assoc 94(5): 492–498, 2004)