Chronic allograft nephropathy (CAN) is a common cause of late kidney transplant failure, characterized by progressive histological damage in the allograft. Although functional biomarkers such as creatinine are typically used to predict CAN, recent evidence suggests that composite, quantitative histological indices may be better predictors of long-term graft outcomes. Calcineurin inhibitors (CNIs) have been associated with major improvements in early rejection outcomes, but appear to cause both acute and chronic nephrotoxicity. The acute phase is associated with functional nephrotoxicity and is reversible with a reduction in CNI dosage, whereas the chronic phase is characterized by persistent histological lesions that are typically irreversible. Results from recent clinical trials suggest that converting from a CNI to sirolimus, withdrawing a CNI from a sirolimus-based regimen or using a CNI-free strategy may improve long-term outcomes by reducing CNI-related nephrotoxicity. However, in the de novo transplant setting, triple therapy with sirolimus, mycophenolate mofetil and corticosteroids is not recommended in combination with basiliximab induction. A treatment algorithm, based on the patient's histological score obtained on an allograft biopsy taken at approximately 6-12 months post-transplant, has been developed by our group and is described here.