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We studied the phenotype of late kidney graft failure in a prospective study of unselected kidney transplant biopsies taken for clinical indications. We analyzed histopathology, HLA antibodies and death-censored graft survival in 234 consecutive biopsies from 173 patients, taken 6 days to 31 years posttransplant. Patients with late biopsies (>1 year) frequently displayed donor-specific HLA antibody (particularly class II) and microcirculation changes, including glomerulitis, glomerulopathy, capillaritis, capillary multilayering and C4d staining. Grafts biopsied early rarely failed (1/68), whereas grafts biopsied late often progressed to failure (27/105) within 3 years. T-cell-mediated rejection and its lesions were not associated with an increased risk of failure after biopsy. In multivariable analysis, graft failure correlated with microcirculation inflammation and scarring, but C4d staining was not significant. When microcirculation changes and HLA antibody were used to define antibody-mediated rejection, 17/27 (63%) of late kidney failures after biopsy were attributable to antibody-mediated rejection, but many were C4d negative and missed by current diagnostic criteria. Glomerulonephritis accounted for 6/27 late losses, whereas T-cell-mediated rejection, drug toxicity and unexplained scarring were uncommon. The major cause of late kidney transplant failure is antibody-mediated microcirculation injury, but detection of this phenotype requires new diagnostic criteria.