Objective The purpose of the current study was to compare the outcomes between SMOT with and without medial distraction arthroplasty (MDA) in the treatment of varus ankle osteoarthritis with increased TT angles. Methods We retrospectively reviewed the functional outcomes and radiological findings of 34 patients who underwent SMOT with or without MDA for varus ankle osteoarthritis with increased TT angles. The American Orthopaedic Foot and Ankle Society (AOFAS) ankle-hindfoot score and Ankle Osteoarthritis Scale (AOS) scores were used for functional evaluation. The tibial anterior surface (TAS) angle, talar tilt (TT) angle, tibial medial malleolar (TMM) angle, talocrural (TC) angle, tibial lateral surface (TLS) angle, and hindfoot alignment (HFA) angle were evaluated preoperatively and at the time of the last follow-up. Results In both groups, the AOFAS score, AOS pain and function scores, and the TAS, TT, TC, TLS, and HFA angles were all significantly improved postoperatively (P < 0.01). When comparing the two groups, the postoperative TT angle was significantly smaller in the SMOT with MDA group (P = 0.023) than in the SMOT group. In addition, the failure rate of TT angle correction was significantly higher in the SMOT group (P = 0.016) than in the SMOT with MDA group. Conclusion SMOT is a promising procedure for functional improvement and malalignment correction for varus ankle osteoarthritis, even in patients with increased talar tilt. If SMOT is combined with MDA, there can be an improvement in the correction of the increased talar tilt.