Malakoplakia is an unusual granulomatous inflammatory disorder associated with diminished bactericidal action of leucocytes that occurs in immunosuppressed hosts. Cases of renal allograft malakoplakia are generally associated with a poor graft and patient survival. We present the case of a 56-year-old female with allograft and bladder malakoplakia occurring two years after renal transplantation complicated by an early antibody mediated rejection. Following a number of symptomatic urinary tract infections caused by resistant Gram-negative bacilli, a diagnosis of malakoplakia was made by biopsy of a new mass lesion of the renal allograft. Cystoscopy also revealed malakoplakia of the bladder wall. Immunosuppressant regimen was modified. Mycophenolate mofetil was ceased, prednisolone reduced to 5 mg/day and tacrolimus concentrations were carefully monitored to maintain trough serum concentrations of 2–4 μg/L. Concurrently, she received a prolonged course of intravenous antibiotics followed by 13 months of dual oral antibiotic therapy with fosfomycin and faropenem. This joint approach resulted in almost complete resolution of allograft malakoplakia lesions and sustained regression of bladder lesions on cystoscopy with histological resolution in bladder lesions. Her renal function has remained stable throughout the illness. If treated with sustained antimicrobial therapy and reduction of immunosuppression, cases of allograft malakoplakia may not necessarily be associated with poor graft survival.