The objective of this study was to compare the prevalence of late effects in the arm and shoulder in patients with breast cancer stage II who had radical modified mastectomy (RM) or breast-conserving therapy (BCT) followed by loco-regional adjuvant radiotherapy with or without chemotherapy/anti-oestrogen. All patients had axillary lymph node dissection. At a median of 47 months (range 32-87) post-surgery, 263 women (RM: n=186, BCT: n=77) were seen during an outpatient visit and had their arm and shoulder function and the presence of lymphedema assessed by a clinical examination, interview and self-rating. Volume calculation was used to measure lymphedema. In the RM group 20% had developed arm lymphedema versus 8% in the BCT group (p=0.02). In multivariate analysis lymphedema was associated with a higher number of metastatic axillary lymph nodes [OR1.14, p=0.02], RM [OR 2.75, p=0.04] and increasing body mass index (BMI) [OR 1.11, p<0.01]. In the RM group 24% had a restricted range of motion in shoulder flexion compared to 7% in the BCT group (p<0.01). Shoulder pain was reported by 32% in the RM group and by 12% in the BCT group (p=0.001). Increasing observation time, RM, and increasing BMI were significantly associated with impaired arm/shoulder function. Arm/shoulder problems including lymphedema were significantly more common after RM compared to BCT in irradiated breast cancer patients who have undergone axillary lymph node dissection. The performance of BCT should be encouraged when appropriate, to ensure a low prevalence of arm/shoulder morbidity including lymphedema.