Femoral version (FV) deformities are common in patients with developmental dysplasia of the hip (DDH) and may contribute to cartilage damage due to abnormal joint loading. Derotational femoral osteotomy (DFO) surgery corrects FV deformities. However there is little consensus about the femoral transection location for DFO, and its influence on joint loads is unknown. The purpose of this study was to compare the effects of two common DFO locations on muscle forces and hip joint reaction forces (JRFs) in patients with DDH. DFO was simulated in nine patients with DDH and abnormal FV using patient-specific musculoskeletal models. Femoral transection for DFO was separately simulated proximal and distal to the lesser trochanter and FV values were corrected to an idealized 15°. JRFs during early and late stance of gait were compared between the two simulated transection locations. Most changes to JRFs were similar between proximal and distal DFO, however, statistically significant differences were found for the medial JRF component during late stance among patients with femoral anteversion (p = 0.01). Force changes from five hip muscles were significantly different between DFO locations, however, changes were minimal. Most changes after DFO in patients with femoral retroversion were opposite of those with femoral anteversion, with anteroposterior and superior JRFs increasing after retroversion correction. After DFO correction, superior and medial JRFs in DDH patients remained elevated compared to controls. Understanding the influence of DFO location on muscle-generated hip forces can help surgeons justify decisions and potentially standardize surgical correction of FV deformities in patients with DDH.