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The pathogenesis of chronic renal allograft rejection (CR) remains obscure. The hypothesis that a subset of CR is mediated by antidonor antibody was tested by determining whether C4d is deposited in peritubular capillaries (PTC) and whether it correlates with circulating antidonor antibodies. All cases (from January 1, 1990, to July 31, 1999) that met histologic criteria for CR and had frozen tissue (28 biopsies, 10 nephrectomies) were included. Controls were renal allograft biopsies with chronic cyclosporine toxicity (n = 21) or nonspecific interstitial fibrosis (n = 10), and native kidneys with end-stage renal disease (n = 10) or chronic interstitial fibrosis (n = 5). Frozen sections were stained by two-color immunofluorescence for C4d, type IV collagen and Ulex europaeus agglutinin I. Antidonor HLA antibody was sought by panel-reactive antibody analysis and/or donor cross matching in sera within 7 wk of biopsy. Overall, 23 of 38 CR cases (61%) had PTC staining for C4d, compared with 1 of 46 (2%) of controls (P < 0.001). C4d in PTC was localized at the interface of endothelium and basement membrane. Most of the C4d-positive CR tested had antidonor HLA antibody (15 of 17; 88%); none of the C4d-negative CR tested (0 of 8) had antidonor antibody (P < 0.0002). The histology of C4d-positive CR was similar to C4d-negative CR, and 1-yr graft survival rates were 62% and 25%, respectively (P = 0.05). Since August 1998, five of six C4d-positive CR cases have been treated with mycophenolate mofetil +/- tacrolimus with a 100% 1-yr graft survival, versus 40% before August 1998 (P < 0.03). These data support the hypothesis that a substantial fraction of CR is mediated by antibody (immunologically active). C4d can be used to separate this group of CR from the nonspecific category of chronic allograft nephropathy and may have the potential to guide successful therapeutic intervention.