Chronic allograft nephropathy (CAN) is the leading cause of renal allograft loss in paediatric renal transplant recipients. CAN is the result of immunological and nonimmunological injury, including acute rejection episodes, hypoperfusion, ischaemia reperfusion, calcineurin toxicity, infection and recurrent disease. The development of CAN is often insidious and may be preceded by subclinical rejection in a well-functioning allograft. Classification of CAN is histological using the Banff classification of renal allograft pathology with classic findings of interstitial fibrosis, tubular atrophy, glomerulosclerosis, fibrointimal hyperplasia and arteriolar hyalinosis. Although improvement in immunosuppression has led to greater 1-year graft survival rates, chronic graft loss remains relatively unchanged and opportunistic infectious complications remain a problem. Protocol biopsy monitoring is not current practice in paediatric transplantation for CAN monitoring but may have a place if new treatment options become available. Newer immunosuppression regimens, closer monitoring of the renal allograft and management of subclinical rejection may lead to reduced immune injury leading to CAN in the paediatric population but must be weighed against the risk of increased immunosuppression and calcineurin inhibitor nephrotoxicity.