BACKGROUND: This study tests the null hypothesis that, among patients aged 65 and older admitted to a United States hospital with an isolated fracture of the proximal humerus (no other injuries or fractures), there are no differences between operative (fixation or arthroplasty) and nonoperative treatments with respect to inpatient adverse events, inpatient mortality, and discharge to a long-term care facility rates accounting for comorbidities. METHODS: Using a large national database representing an estimated 132,005 patients aged 65 and older admitted to a US hospital with an isolated proximal humerus fracture between 2003 and 2007. Sixty-one percent did not have surgery, 22% were treated with open reduction and internal fixation (ORIF), and 17% were treated with arthroplasty. RESULTS: The risk of an in hospital adverse event was 21% overall and was 4.4 times greater with arthroplasty and 2.7 times greater with ORIF compared to nonoperative treatment. The risk of in hospital death was 1.8% overall and was 2.8 times greater with ORIF compared to nonoperative treatment. Patients treated operatively were less likely to be discharged to a long-term facility compared to patients treated nonoperatively. CONCLUSION: In spite of a tendency to treat the most infirm patients (those that are not discharged to home) nonoperatively, operative treatment (open reduction and internal fixation in particular) is an independent risk factor for inpatient adverse events and mortality in older-aged patients admitted to the hospital with an isolated fracture of the proximal humerus and should perhaps be offered more judiciously.