Background Osteotomy of the lesser tuberosity in shoulder arthroplasty allows bony healing of the subscapularis tendon but does not prevent fatty degeneration in its muscle. Occurrence or increase in fatty degeneration may depend on the surgical technique. Questions/purposes We (1) assessed fatty degeneration in the subscapularis muscle and its cross-sectional area after a C-block osteotomy of the lesser tuberosity with minimal mobilization of the subscapularis muscle, and (2) determined whether this technique had any adverse effect on function, fatty degeneration, and cross-sectional area of the subscapularis muscle. Methods We retrospectively examined 36 patients with shoulder replacements who had C-block osteotomies. Constant-Murley scores and clinical signs of subscapularis insufficiency were recorded. We radiographically assessed prosthetic placement. On CT scans, lesser tuberosity healing, fatty degeneration, and cross-sectional area of the subscapularis muscle were determined. The minimum followup was 13 months (mean, 18 months; range, 13-33 months).