Purpose The purpose of this study was to identify the correlation between the vascular development of the femoral head and avascular necrosis (AVN) in patients with developmental dysplasia of the hip (DDH) treated by closed reduction (CR). Methods We retrospectively reviewed 78 patients with DDH treated by CR (83 hips). The vascular maturity, number of vessels and perfusion changes of the femoral head were assessed on perfusion MRI (pMRI) before and after CR. Results The number of vessels (mean 4.2 sd 1.4) of the femoral head and the ratio (36.1%) of mature vessels (type III) on the dislocated side were significantly less than those at contralateral side (mean 6.0 sd 1.2; 82.2%) (p < 0.001). Of the included 83 hips, 39 hips (61.5%) showed decreased perfusion of the femoral head, including partial decreased (Class B, 47.0%) and global decreased (Class C, 14.5%), at the dislocated side, which was significantly more than those at contralateral side (0.0%) (p < 0.001). In total, 32 out of 83 hips (38.5%) developed AVN. The rate of AVN with Class A (18.8%) which perfusion of the femoral head was normal (unchanged or enhanced) was significantly less than those with Class C (66.7%) (p = 0.006). Conclusion The vascular development and perfusion changes of the femoral head on the dislocated side are significantly worse than those at contralateral side. Immature vascularity of the femoral head before CR and poor perfusion of the femoral head after CR may be risk factors for AVN in patients with DDH. Level of evidence III