Radical ablative surgery for upper extremity sarcoma often results in significant loss of function. With the recent emphasis on limb preservation, function-sparing excision has been combined with adjuvant radiation and chemotherapy in an increasing number of patients. To assess the effect of changing management on local recurrence rates and identify factors governing local failure, the records of 108 patients with operable, nonmetastatic soft tissue sarcoma of the upper extremity, treated at the Memorial Sloan-Kettering Cancer Center between 1968 and 1978, were reviewed. Median follow-up care was 8.2 years. One third of the patients presented with locally recurrent tumors after initial treatment elsewhere. Over half of the lesions were above the elbow and 62% were high grade. Seventy-three patients (68%) had limb-sparing surgery (LSS), but margins were considered adequate in less than half. Local recurrence was directly related to the adequacy of the surgical margins and was significantly higher in the LSS patients (p = 0.008). Other factors associated with an increased risk of local failure included: presentation with local recurrence, superficial location, and invasion of vital structures (LSS only). Local failure varied significantly with histologic.