The most common cause of chronic allograft loss is an incompletely understood clinicopathological entity called chronic rejection (CR). Recent reports suggest an improvement in long–term renal allograft survival, although it is not clear from these data whether a true reduction of biopsy–proven CR has occurred. Although newer immunosuppressive medications have greatly reduced the incidence of acute rejection (AR) in the early post–transplantation period, the ideal therapy for both AR and CR would be to achieve a state of tolerance. By definition, such a state should allow for indefinite allograft survival, with no histopathological evidence of CR, despite immunocompetence in the host (i.e. without the need for chronic immunosuppression). Although several experimental studies are able to achieve tolerance, with clear improvement in allograft survival, detailed studies on graft function and morphology are often not included. This review will discuss possible ways that tolerance induction could lead to a CR–free state. General mechanisms of CR and transplantation tolerance induction are discussed as well as the difficulties in translating small animals studies into large animals and humans.