Human polyoma virus (PV) interstitial nephritis occurs in immunosuppressed patients after reactivation of latent virus in renal epithelium. Currently, there is neither general consensus about the incidence of clinically significant PV infection in renal transplants nor conclusive evidence determining its significance in the long-term graft outcome. We evaluated 601 renal transplant biopsy specimens (from 365 patients) by routine light microscopy and immunoperoxidase stains with antibody against SV40 (which cross reacts with PV). We also examined urine samples from 200 patients (100 obtained concurrently with a renal biopsy in patients presenting with acute graft dysfunction and 100 from patients with stable graft function). Electron microscopic evaluation was performed in 50 renal biopsy specimens and in 23% of all urine samples. PV was identified in 1.8% biopsy specimens (1.9% of patients). PV interstitial nephritis showed the typical viral cytopathic changes in tubular epithelial cells associated with marked tubular damage and a disproportionately mild degree of tubulitis. There was no difference in the incidence of PV in the urine of patients with acutely deteriorating versus stable renal function (18% and 19%, respectively); however, urines with large numbers of infected cells (> 10/cytospin) and inflammatory changes in the sediments corresponded invariably to patients with acute allograft dysfunction (8 of 8), and in most cases to biopsy specimens showing PV interstitial nephritis (7 of 8). Based on these findings, urine samples seem to be the most sensitive and cost-effective screening method for PV infection; only urine samples with inflamed sediments and abundant infected cells correlate with clinically significant disease. In these cases, examination of a renal biopsy is indicated. Immunohistochemical stains are useful to confirm the presence of PV but do not increase the sensitivity of diagnosis of PV if this is not already suspected on routine light microscopy. In our material, immunostains were helpful ruling out the presence of PV in a small number of biopsy specimens (2%) that showed markedly reactive tubular cells resembling PV infection. Most patients with PV interstitial nephritis responded to decreased immunosuppression; however, the decay in graft function (based on creatinine slopes) was significantly more rapid in these patients than in matched controls. Evidence of PV infection should be systematically sought in renal biopsy specimens and urine samples from renal allograft recipients.