CAN is the final common pathway of renal allograft damage and thus arises from many different causes. The specific features of interstitial fibrosis and tubular atrophy are widespread within the kidney, reproducible in small biopsy samples and most easily classified by the pathologist. Grading of CAN under the Banff schema has involved an assessment of the severity of chronic interstitial fibrosis and tubular atrophy. In the new iteration of the Banff schema the term CAN has been abandoned in favour of an impossibly clumsy inference to sclerosis and tubular atrophy, but the intent to describe the fibrosis and tubular changes remains. Renal allograft fibrosis occurred in two phases with most of the impact seen within the first year. Early interstitial fibrosis is greater than the amount of tubular damage suggesting a role for both ischaemia-reperfusion injury and direct immune mediated mechanisms in causing interstitial injury. Acute tubular necrosis is predictive of CAN with risk factors for the development of CAN by 26 weeks including transplantation of a kidney from a deceased donor, a longer cold ischaemic time and acute rejection episodes. Subclinical inflammation which under the Banff schema would merit the diagnosis of rejection, but which is not associated with acute changes in creatinine, leads to increased interstitial fibrosis and CAN. Persistent subclinical rejection in sequential biopsies taken after the first year, though confined to small numbers of patients also leads to progressive increases in fibrosis and decline in renal function. Untreated inflammatory cell infiltration of the renal allograft insidiously destroys tubules and fibroses the interstitium, and because it is not associated with acute changes in serum creatinine remains undetected until graft function deteriorates beyond retrievable levels. Treatment is able to ameliorate this damage and prevent deterioration of graft histology and long term function.