Abstract Background and Aims Acute kidney injury (AKI) in renal allograft recipients (RAR) is an important factor for short and long-term allograft function and survival. RAR are at high risk of AKI. The etiology, risk factors, and outcomes of AKI in RAR differ from that of AKI in the community setting. This study aimed to evaluate the spectrum and impact of AKI episodes on RAR outcome. Method This was a single-centre, prospective observational study on 84 live RAR patients who developed 105 AKI episodes as per Kidney Disease Improving Global Outcome (KDIGO) criteria between January 2018 to December 2019. The severity of AKI was categorized as per KDIGO guidelines. Acute rejection, recurrence of native kidney disease, and de nova glomerulonephritis were diagnosed by graft biopsy. These patients were followed for 3 months after AKI episodes. Results The mean age of our study populations was 38.1 ± 13.2 years. Mean serum creatinine at the time of AKI episode was 2.63 ± 0.95 mg/dL. The causes of AKI in our study population were infections (n 48, 45.7% ), dehydration (n 25, 23.8%), biopsy-proven rejection (n 9,8.6%) calcineurin inhibitor toxicity (n 10, 9.5%), biopsy-proven acute tubular necrosis (n 4, 3.8%), recurrence of native kidney disease (n 4, 3.8%), and miscellaneous causes (n 5, 4.8%). Most of the AKI episodes (62.9%) developed in the first year of the transplant, while as 29 (27.6%) cases developed between 1st and 2nd post-transplant year and 10 (9.5%) cases developed AKI beyond 2 years post-transplant. Sixty-four cases (60.9%) of AKI were in KDIGO stage 1, 30 cases (28.6%) were in AKI stage 2 and 11 cases (10.5%) were in AKI stage 3. Previous episodes of AKI (p<0.0001), need for dialysis at the time of AKI (p=0.0016), and higher stage of AKI (p<0.0001) were the factors associated with nonrecovery of graft functions at 3 months follow-up. At 3 months of follow up, AKI had a significant impact on allograft function. Conclusion In our study, AKI in RAR had a significant impact on allograft function. Multiple episodes of AKI, need for dialysis, and higher stage of AKI appear to affect the renal recovery at 3 months post-AKI.