Interstitial nephritis owing to polyoma virus infection (PVi) mimics acute allograft rejection. The risk factors for graft failure associated with PVi are unknown. This prompted us to analyse the relationship between the use of antilymphocyte agents (ALA) and graft dysfunction in renal transplant recipients with PVi. Renal transplant recipients who were diagnosed to have PVi nephritis at the Medical College of Wisconsin were included in this study. PVi nephritis was confirmed by urine cytology and characteristic renal histological findings in a total of 14 cases. Other viruses were excluded by immunohistochemistry studies. Patients were divided into two groups: Group A (n = 7) received ALA (OKT3/ATGAM) as treatment for presumptive acute rejection and Group B (n = 7) did not receive ALA therapy. The progression of renal function (GFR) was estimated by a 100/ plasma creatinine and an actuarial kidney survival was estimated by the Kaplan-Meier method. The demographics (age, gender, race, retransplant and kidney versus. kidney/pancreas), prior treatment with steroids for presumptive acute rejection, and renal function at the time of PVi diagnosis were similar betwoen groups. The fall in GFR/month was 6 mL/min/month with prior ALA therapy compared with 1 mL/min/month in those who did not receive ALA, p = 0.002. All seven grafts were lost in the ALA group compared with only two of seven grafts in the other group, p = 0.005. The use of ALA was associated with a rapid fall in GFR and graft failure in patients with PVi nephritis. Careful diagnosis of PVi is warranted in renal allograft recipients prior to initiating ALA therapy.