The Gamma nail was introduced for the treatment of peritrochanteric fractures with the theoretical advantage of a load-sharing femoral component which could be implanted by a closed procedure. We report a randomised prospective study of 186 fractures treated by either the Gamma nail or a dynamic hip screw. Gamma nails were implanted with significantly shorter screening times, smaller incisions, and less intraoperative bleeding. The Gamma nail group had a shorter convalescence and earlier full weight-bearing, but there was no significant difference in mortality within six months, postoperative mobility, or hip function at review. More intra-operative complications were recorded in the Gamma nail group, mainly due to the mismatching of the femoral component of the nail to the small femurs of Chinese people. Use of a smaller modified nail reduced these complications. We conclude that with careful surgical technique and the modified femoral component, the Gamma nail is an advance in the treatment of peritrochanteric fractures.