Septostomy, a rupture of the diamniotic membrane separating monozygotic twins essentially creating a monoamniotic gestation, is a potential therapeutic modality for twin-twin transfusion syndrome (TTTS). This may be associated with complications including cord entanglement or complete rupture of the membranes. We report a case of severe amniotic band syndrome with cord amputation after septostomy. A 33-year-old woman with a Mo-Di twin pregnancy was diagnosed with TTTS at 18 weeks of gestation. Septostomy as well as amnioreduction were performed at 24 weeks of gestation. A repeat cesarean delivery was performed at 31 weeks resulting in a live recipient baby of 1340 g and a dead donor with amniotic band syndrome. The donor showed pieces of membrane tightening both legs. The right thigh became entangled in the bands connecting to the umbilical cord of the live fetus. The umbilical cord of the dead twin was completely amputated, whereas the umbilical cord of the live infant was also entrapped within the amniotic band resulting in small diameter and some degree of stricture. This is the first report of a rare but serious complication following septostomy.