We analyzed the development of chronic rejection in 511 kidney-only renal transplants in 507 patients between July 1987 and November 1994. A database was established for recipients > or = 18 years old who received cyclosporine-based immunosuppression and demonstrated graft survival for a minimum of 12 months. The 347 recipients of cadaver transplants (67.9%) and 164 recipients of live donor transplants (32.1%) were followed for 12 to 102 months (mean 51 months). Chronic rejection was diagnosed in 124 transplants (24%), with a mean time to diagnosis of 23+/-18 months (range 3-92). Risk factors were identified in a multivariate analysis using the Cox model. The impact of the timing and severity of rejection episodes was analyzed in a univariate model. The presence of chronic rejection resulted in decreased (P=0.0001) 5-year graft survival for both cadaver graft (83.7% vs. 58.2%) and live donor graft (93.2% vs. 53.1%) recipients. Significant variables for the development of chronic rejection included an acute rejection episode (P=0.0001), a black recipient (P=0.0006), donor age > or = 50 years (P=0.006), and a serum creatinine level >2.0 mg/dl by 6 months after transplantation. Severity of rejection measured by peak serum creatinine or posttreatment return to baseline was not related to chronic rejection. However, acute rejection episodes lasting for more that 5 days (P=0.03) or occurring after 6 months (P=0.001) did influence time to chronic rejection. In addition, mismatching for donor-recipient race was a significant (P=0.008) risk factor for recipients of cadaver grafts. We conclude that acute rejection is the most significant risk factor for chronic rejection, and the long-term fate of grafts may be determined as early as the first 6 months. Racial matching of donor-recipient pairs may be useful to minimize chronic rejection risk. Future advances that diminish the incidence and severity of acute rejection may have the greatest impact on long-term survival.