Acute rejection in the early post-transplant period is a major determinant of long-term outcome. A cohort analysis was performed to evaluate the race-specific incidence rates of early acute rejection episodes (AR) and delayed graft function (DGF) in Americans of African (blacks) and European (whites) descent (N = 2565) who received a 2-HM living-related donor (LRD) first kidney transplant between 1984 and 1992. After adjusting for center and recipient characteristics, blacks had a higher incidence of AR during the initial transplant hospitalization (blacks 13.2% vs. whites 7.4%, OR = 1.64, P = 0.02). DGF also occurred more frequently in blacks (unadjusted OR = 1.58, P = 0.07). Blacks with AR had significantly worse Cox-adjusted five year graft survival than similarly affected whites (blacks 50% vs. whites 76%, P < 0.01). We conclude that failure to take immunosuppressive medications cannot be implicated as a cause of the higher incidence of AR during the initial transplant hospitalization in black kidney transplant recipients. The excess risk of AR in blacks may reflect previously reported intrinsic differences in immune responsiveness and/or pharmacokinetics of immunosuppressive agents. The profound deleterious effect of AR appears to be largely responsible for the accelerated rate of late graft loss in African Americans.