Dialysis patients are at risk for sepsis, and the risk may be even higher among transplant failure patients because of previous or ongoing immunosuppression. The incidence and the consequences of sepsis as defined by International Classification of Diseases, Ninth Revision, Clinical Modification hospital discharge diagnoses codes were determined among 5117 patients who initiated dialysis after transplant failure between 1995 and 2004 in the United States. The overall sepsis rate was 11.8 per 100 patient years (95% confidence interval [CI] 11.5 to 12.1). Sepsis was highest in the first 6 mo after transplant failure (35.6 per 100 patient years [95% CI 29.4 to 43.0] between 0 to 3 mo after transplant failure; 19.7 per 100 patient years [95% CI 17.2 to 22.5] between 3 to 6 mo after transplant failure). In comparison, the sepsis rate among incident dialysis patients between 3 and 6 mo after dialysis initiation was 7.8 per 100 patient years (95% CI 7.3 to 8.3), whereas the sepsis rate among transplant recipients between 3 and 6 mo after transplantation was 5.4 per 100 patient years (95% CI 4.9 to 5.9). Patients who were > or =60 yr, obese patients, patients with diabetes, and patients with a history or peripheral vascular disease or congestive heart failure were at risk for sepsis. Transplant nephrectomy was not associated with septicemia. The role of continued immunosuppression and vascular access creation was not assessed and should be addressed in future studies. In a multivariate analysis, patients who were hospitalized for sepsis had an increased risk for death (hazard ratio 2.93; 95% CI 2.64 to 3.24; P < 0.001). Strategies to prevent sepsis during the transition from transplantation to dialysis may improve the survival of patients with allograft failure.