Thumb hypoplasia, a congenital deficiency of bony and soft tissue of thumb, is often associated with systemic syndromes like Holt-Oram syndrome, and is the second most common thumb anomaly after duplicated thumb. It has traditionally been classified into six categories, which help guide treatment including reconstruction versus pollicization (transfer of the index finger to thumb). Amputation of the thumb and pollicization is the traditional treatment for a IIIB hypoplastic thumb. A five-year-old girl presented with a classic type IIIB hypoplastic thumb in which she has absent motor function, aplasia of the metacarpal, shortened first web space, and an unstable but present carpometacarpal (CMC) joint. Instead of amputation, the thumb was reconstructed by capsulodesis to stabilize the CMC joint, Huber Transfer Opponensplasty and abductor pollicis longus transfer to restore motor function, W-plasty to deepen the first web space, and distraction to lengthen the metacarpal. The patient tolerated the multi-stage reconstruction and bony distraction well. She was followed for one year postoperatively and has demonstrated a functional thumb. This case questions the surgical algorithm for hypoplastic thumbs and suggests a revised classification system for hypoplastic thumbs which would further divide class III based on not only the stability of the CMC joint but the presence or absence of the joint as well. We propose that amputation be reserved for type III hypoplastic thumbs in which the CMC joint is absent, (revised class IIIC) and reconstruction be attempted when the joint is present irrespective of stability (revised classes IIIA and IIIB).