Foreign body synovitis with extensive granulomatous giant cell reaction to refractile polyethelene debris is a complication of subtalar arthroereisis not previously reported. We present two cases whereby STA-peg implants were used to treat bilateral painful flexible flatfoot deformities in children. Two boys, presented at 7 and 10 years of age, 2 years after STA-peg procedures and tendo-Achilles lengthening for painful flatfeet. They each had minimal subtalar motion and pain at the sinus tarsi. Radiographs demonstrated surgical defects in the calcaneus with surrounding high signal on the magnetic resonance imaging (MRI) in the subchondral bone of the calcaneus and talus. Both patients failed conservative management and had their implants removed with good relief of their pain. Histology was submitted at the time of implant removal. We present the radiographic and pathologic findings seen in these two patients with failed subtalar arthroereisis due to extensive implant reaction. The pathologic process seen in these patients is a previously unreported complication of this procedure. We do not recommend arthroereisis in the treatment of painful flexible flatfoot in children.