The prevalence of subclinical rejection, by the Banff criteria, is approximately 30% in the first 3 mo in renal transplant recipients. A randomized study was performed to determine whether the treatment of subclinical rejection with corticosteroids was associated with improved outcomes in these patients. Seventy-two patients, stratified by donor source, were randomized to biopsies at 1, 2, 3, 6, and 12 mo (Biopsy group), or to 6- and 12-mo biopsies only (Control group). Patients were analyzed by "intent to treat" and were followed for a minimum of 2 yr. Patients in the Biopsy arm of the study had a significant decrease in early (months 2 and 3) and late (months 7 to 12) acute rejection episodes, a reduced chronic tubulointerstitial score at 6 mo, and a lower serum creatinine at 24 mo than did patients in the Control arm. There was a trend toward an increase in infectious morbidity, but no increase in mortality, in the patients randomized to the Biopsy group. The results of this study suggest that early protocol biopsies and the treatment of subclinical rejection with corticosteroids may lead to better histologic and functional outcomes in renal transplant recipients.