Short-term outcomes in renal transplantation have improved significantly in the past few years. However, the improvement in long-term outcomes has been modest. The reasons for graft failure beyond the first year of transplantation have been attributed to several different factors. We believe that subclinical rejection (SCR) may be 1 of the factors that contribute to graft loss in the long run. We also believe that there are data to suggest that SCR leads to progressive fibrosis and loss of graft function. This has been demonstrated even in patients who have mild degrees of subclinical inflammation. This review outlines the major studies that have been published on this important topic. It also outlines potential risk factors for the development of SCR. The current approach and diagnostic methods are discussed as well as their pros and cons. Newer noninvasive methods of diagnosis as well as molecular diagnostics and their merits and shortcomings are also discussed in some depth. Thus, the proposed state of the art review on SCR will create a renewed interest at all levels including transplant clinicians, transplant researchers, pharmaceutical industries as well as regulatory organizations.