The effect of acute allograft rejection (AR) on long-term pancreas allograft function is unclear. We retrospectively studied 227 consecutive pancreas transplants performed at our institution between January 1, 998 and December 31, 2009 including: 56 simultaneous pancreas and kidney (SPK), 69 pancreas transplantation alone (PTA); and 102 pancreas after kidney (PAK) transplants. With a median follow-up of 6.1 (IQR 3–9) years, 57 patients developed 79 episodes of AR, and 19 experienced more than one episode. The cumulative incidence for AR was 14.7%, 19.7%, 26.6% and 29.1% at 1, 2, 5 and 10 years. PTA transplant (hazards ratio [HR] = 2.28, p = 0.001) and donor age (per 10 years) (HR = 1.34, p = 0.006) were associated with higher risk for AR. The first AR episode after 3 months post PT was associated with increased risk for complete loss (CL) (HR 3.79, p < 0.001), and the first AR episode occurring during 3- to 12-month and 12- to 24-month periods after PT were associated with significantly increased risk for at least partial loss (PL) (HR 2.84, p = 0.014; and HR 6.25, p < 0.001, respectively). We conclude that AR is associated with increased risk for CL and at least PL. The time that the first AR is observed may influence subsequent graft failure.