Injury to the axillary artery following proximal humerus fracture is a very rare occurrence. The most common mechanism of axillary artery injury is fracture dislocation, resulting with intimal tears, arterial lacerations or avulsions. The most common lesion is the subtotal transaction of the vessel. In this report, we aim to define entrapment of axillary artery by tethering of anterior circumflex humeral artery, which is an unreported mechanism of injury that occurred after a proximal humerus fracture. Diminution of pulse with abduction of arm was the only finding at initial examination, and diagnosis was confirmed with angiography. Treatment was accomplished through ligation and release of anterior circumflex artery with reduction and fixation of fracture fragments, resulting with full recovery. We also have reviewed current literature about axillary artery injuries following proximal humeral fracture.