In kidney transplantation, many inflamed biopsies with changes insufficient to be called T-cell-mediated rejection (TCMR) are labeled “borderline”, leaving management uncertain. This study examined the nature of borderline biopsies as a step toward eventual elimination of this category. We compared 40 borderline, 35 TCMR and 116 nonrejection biopsies. TCMR biopsies had more inflammation than borderline but similar degrees of tubulitis and scarring. Surprisingly, recovery of function after biopsy was similar in all categories, indicating that response to treatment is unreliable for defining TCMR. We studied the molecular changes in TCMR, borderline and nonrejection using microarrays, measuring four published features: T-cell burden; a rejection classifier; a canonical TCMR classifier; and risk score. These reassigned borderline biopsies as TCMR-like 13/40 (33%) or nonrejection-like 27/40 (67%). A major reason that histology diagnosed molecularly defined TCMR as borderline was atrophy-scarring, which interfered with assessment of inflammation and tubulitis. Decision tree analysis showed that i-total >27% and tubulitis extent >3% match the molecular diagnosis of TCMR in 85% of cases. In summary, most cases designated borderline by histopathology are found to be nonrejection by molecular phenotyping. Both molecular measurements and histopathology offer opportunities for more precise assignment of these cases after clinical validation.