Renal allograft acute cellular rejection (ACR) is a T-cell mediated disease that is diagnosed histologically. However, many normally functioning allografts have T-cell infiltrates and histological ACR, and many nonimmune processes cause allograft dysfunction. Thus, neither histological nor functional criteria are sufficient to establish a significant rejection, and the fundamental features of clinical rejection remain undefined. To differentiate allograft lymphocyte infiltration from clinically significant ACR, we compared renal biopsies from patients with ACR to patients with: sub-clinical rejection (SCR, stable function with histological rejection); no rejection; and nontransplanted kidneys. Biopsies were compared histologically and transcriptionally by RT-PCR for 72 relevant immune function genes. Neither the degree nor the composition of the infiltrate defined ACR. However, transcripts up-regulated during effector TH1 T-cell activation, most significantly the transcription factor T-bet, the effector receptor Fas ligand and the costimulation molecule CD152 clearly (p = 0.001) distinguished the patient categories. Transcripts from other genes were equivalently elevated in SCR and ACR, indicating their association with infiltration, not dysfunction. Clinically significant ACR is not defined solely by the magnitude nor composition of the infiltrate, but rather by the transcriptional activity of the infiltrating cells. Quantitative analysis of selected gene transcripts may enhance the clinical assessment of allografts.