Aim The aim of this study was to determine whether the absence of periosteal reaction on plain radiographs was predictive of exchange nail failure in lower limb diaphyseal fracture non-unions. Methods A consecutive cohort of 20 femora and 35 tibiae undergoing exchange nailing for diaphyseal aseptic (n=39) and septic (n=16) fracture non-union at a single centre from 2003 to 2010. Multiple causes of non-union were found in 29 patients (53%) with infection present in 16 cases (29.1%). Of this cohort 49 fracture non-unions had complete radiographic records (19 femora and 30 tibiae) allowing evaluation of the periosteal callus. The primary outcome was the number of number of revision procedures required to achieve union. Failure was defined was as the requirement of >two revision procedures to achieve union. Results The absence of periosteal callus from the fracture site on all four cortices conferred a relative risk ratio (RRR) 5.00 (p=0.006) of exchange nail failure in septic fracture non-unions. Receiver operator characteristic curve analysis of number of cortices with periosteal reaction for predicting exchange nail (>two exchange nail procedures) failure in both septic and aseptic cases found an area under the curve of 0.79 (95% confidence interval 0.675–0.904, p<0.0001). The complete absence of callus within 5 mm of the fracture site had a 75% chance of requiring 3 or more exchange nails to obtain union. Conversely the presence periosteal callus on at least one cortex within 5mm of the fracture site had a 100% chance the fracture would unite following 1 or 2 exchange nail procedures. Conclusion Careful radiographic analysis of lower limb diaphyseal non-union should be undertaken before exchange nailing. The absence of periosteal reaction on plain radiographs in septic fracture non-union is predictive of exchange nail failure.