Histopathological findings of 13 LRD and 17 CAD renal allografts of paediatric recipients were prospectively semiquantitatively scored and correlated with clinical and functional parameters 18 and 36 months after transplantation. The most common findings at 18 months were diffuse interstitial fibrosis (incidence 57%), glomerular mesangial matrix increase (91%), arteriolar intimal proliferation (70%), and tubular atrophy (83%). Most changes were mild and most biopsies were scored normal or borderline (Banff classification). At 18 and at 36 months 30% of grafts showed mild chronic rejection (CR). Only two grafts showed grade II CR at 18 months and one graft grade III CR at 36 months. Progressive CR was not seen. Donor source or recipient age had no effect on graft histology. Vascular-interstitial cyclosporin (CsA) nephrotoxicity was not found. On the contrary, cumulative CsA dose (mg/kg/day) showed an inverse correlation with arteriolar intimal proliferation (P < 0.001). 51Cr-EDTA and lithium clearances showed inverse correlations with diffuse interstitial fibrosis and lymphocytosis. PAH clearance did not correlate with interstitial or vascular changes. The results indicate good prognosis in children on triple immunosuppression (with CsA administered in three doses/day to pre school children) regardless of donor source.