Penetrating keratoplasty is the most widely practiced type of transplantation in humans. Irreversible immune rejection of the transplanted cornea is the major cause of human allograft failure in the intermediate and late postoperative period. This immunological process causes reversible or irreversible damage to the grafted cornea in several cases despite the use of intensive immunosuppressive therapy. Corneal graft rejection comprises a sequence of complex immune responses that involves the recognition of the foreign histocompatibility antigens of the corneal graft by the host's immune system, leading to the initiation of the immune response cascade. An efferent immune response is mounted by the host immune system against these foreign antigens culminating in rejection and graft decompensation in irreversible cases. A variety of donor- and host-related risk factors contribute to the corneal rejection episode. Epithelial rejection, chronic stromal rejection, hyperacute rejection, and endothelial rejection constitute the several different types of corneal graft rejection that might occur in isolation or in conjunction. Corneal graft failure subsequent to graft rejection remains an important cause of blindness and hence the need for developing new strategies for suppressing graft rejection is colossal. New systemic pharmacological interventions recommended in corneal transplantation need further evaluation and detailed guidelines. Two factors, prevention and management, are of significant importance among all aspects of immunological graft rejection. Preventive aspects begin with the recipient selection, spread through donor antigenic activity, and end with meticulous surgery. Prevention of corneal graft rejection lies with reduction of the donor antigenic tissue load, minimizing host and donor incompatibility by tissue matching and suppressing the host immune response. Management of corneal graft rejection consists of early detection and aggressive therapy with corticosteroids. Corticosteroid therapy, both topical and systemic, is the mainstay of management. Addition of immunosuppressive to the treatment regimen helps in quick and long term recovery. Knowledge of the immunopathogenesis of graft rejection may allow a better understanding of the immunological process thus helping in its prevention, early detection and management.