Brachial plexus birth injury (BPBI) results in shoulder and elbow paralysis with shoulder internal rotation and elbow flexion contracture as frequent sequelae. The purpose of this study was to develop a technique for measuring functional movement and examine the effect of brachial plexus injury location (preganglionic and postganglionic) on functional movement outcomes in a rat model of BPBI, which we achieved through integration of gait analysis with musculoskeletal modeling and simulation. Eight weeks following unilateral brachial plexus injury, sagittal plane shoulder and elbow angles were extracted from gait recordings of young rats (n = 18), after which rats were sacrificed for bilateral muscle architecture measurements. Musculoskeletal models reflecting animal-specific muscle architecture parameters were used to simulate gait and extract muscle fiber lengths. The preganglionic neurectomy group spent significantly less (p = 0.00116) time in stance and walked with significantly less (p < 0.05) elbow flexion and shoulder protraction in the affected limb than postganglionic neurectomy or control groups. Linear regression revealed no significant linear relationship between passive shoulder external rotation and functional shoulder protraction range of motion. Despite significant restriction in longitudinal muscle growth, normalized functional fiber excursions did not differ significantly between groups. In fact, when superimposed on a normalized force-length curve, neurectomy-impaired muscle fibers (except subscapularis) accessed regions of the curve that overlapped with the control group. Our results suggest the presence of compensatory motor control strategies during locomotion following BPBI. The clinical implications of our findings support emphasis on functional movement analysis in treatment of BPBI, as functional and passive outcomes may differ substantially.