Effects of laparoscopic donor nephrectomy (LDN) on graft function, especially early post-transplant, have been controversial. To assess and compare early and late graft function in kidneys procured by open and laparoscopic methods, a retrospective observational study was carried out on 37 recipients-donors who underwent LDN after introduction of this technique in February 2007 at our center, a tertiary care nephrology referral center. Demographic, immunological and intraoperative variables as well as immunosuppressive protocols and number of human leukocyte antigen (HLA) mismatches were noted. Early graft function was assessed by serum creatinine on Days two, five, seven, 14 and 28 and at the time of discharge. Serum creatinine values at three months and at one year post-transplant were considered as the surrogates of late graft function. Data obtained were compared with the data from 33 randomly selected kidney transplants performed after January 2000 by the same surgical team, in whom open donor nephrectomy was used. Pearson's chi square test, Student's t test and Mann-Whitney U test were used for statistical analysis. Early graft function (serum creatinine on Day five 2.15 mg/dL vs 1.49 mg/dL, P = 0.027) was poorer in the LDN group. Late graft function as assessed by serum creatinine at three months (1.45 mg/dL vs 1.31 mg/dL, P = 0.335) and one year (1.56 mg/dL vs 1.34 mg/dL, P = 0.275) was equivalent in the two groups. Episodes of early acute graft dysfunction due to acute tubular necrosis were significantly higher in the LDN group (37.8% vs 12.1%, Z score 2.457, P = 0.014). Warm ischemia time was significantly prolonged in the LDN group (255 s vs 132.5 s, P = 0.002). LDN is associated with slower recovery of graft function and higher incidence of early acute graft dysfunction due to acute tubular necrosis. Late graft function at one year is however comparable.