Chronic allograft nephropathy is the most prevalent cause of renal transplant failure in the first post-transplant decade, but its pathogenesis has remained elusive. Clinically, it is characterized by a slow but variable loss of function, often in combination with proteinuria and hypertension. The histopathology is also not specific, but transplant glomerulopathy and multilayering of the peritubular capillaries are highly characteristic. Several risk factors have been identified, such as advanced donor age, delayed graft function, repeated acute rejection episodes, vascular rejection episodes, and rejections that occur late after transplantation. A common feature of chronic allograft nephropathy is that it develops in grafts that have undergone previous damage, although the mechanism(s) responsible for the progressive fibrosis and tissue remodeling has not yet been defined. Hypotheses to explain chronic allograft nephropathy include the immunolymphatic theory, the cytokine excess theory, the loss of supporting architecture theory, and the premature senescence theory. The most effective option to prevent chronic allograft nephropathy is to avoid graft injury from both immune and nonimmune mechanisms.