Introduction: Reconstruction of complex, open-grade distal femur fracture with bone defect presents an orthopaedic surgeon with a distinctive challenge as they are often associated with contaminated, compromised soft tissue and poor host condition. Conventional techniques like vascularized fibula transfer, autologous bone grafting or distraction osteogenesis focus mainly over bone union without taking infection control into consideration. The aim of this study is to evaluate the outcome of induced membrane technique in the reconstruction of open distal femur fracture with bone defect. Methods: 10 such patients were retrospectively evaluated. Union was considered when a minimum of two cortices were seen on a radiograph. Knee Society Score was used to evaluate the functional outcome. Results: The average length of the defect was 5.7cm (3–10 cm) with mean interval period between the two stages being 42.7 days (34–51 days). Internal fixation was carried out in all cases. In 7 patients we used a mixture of cancellous autograft and cancellous allograft mixed in a ratio of 3:1. In the remaining 3 patients we used only cancellous autograft. Radiological union was achieved in all patients with mean union time of 8.5 months (7–11 months). Mean knee score was 79 (69–86) and mean function score was 71.5 (60–80). Conclusion: The induced membrane technique is an economical, technically less demanding technique for reconstruction of distal femur fracture with bone defects. The results are reproducible with a high success rate and without the need of any special instrumentation. It bestows infection control and prevents graft resorption. Long reconstructive period and donor site morbidity are matters of concern.