The incidence of nerve injuries in primary shoulder dislocation and humeral neck fracture is uncertain. We made a prospective study of 101 patients, using clinical examination and extensive electrophysiological assessment when there was suspicion of nerve damage. We found electrophysiological evidence of nerve injury in 45%, most involving the axillary, suprascapular, radial and musculocutaneous nerves. There were significantly more nerve injuries in older patients and those with a haematoma. Most patients recovered partially or completely in less than four months, and only eight had persistent motor loss. Early diagnosis and physiotherapy are recommended.