The aim of this study was to evaluate the influence of vascular endothelial growth factor (VEGF) on renal function and on development of interstitial fibrosis (IF) in renal allografts. Tubular and interstitial expressions of VEGF and TNF-alpha, and density of macrophages in the interstitium were examined in 92 patients with nonrejected kidneys, acute rejection (AR), chronic allograft nephropathy (CAN), borderline changes (BC) and acute cyclosporin A (CsA) toxicity. Follow-up biopsy specimens from patients with AR and BC were evaluated for development of IF. A significant difference in tubular and interstitial VEGF expressions was found between patients with AR, BC, CAN and CsA toxicity (p < 0.001). Macrophage infiltration was positively correlated with VEGF and TNF-alpha expressions (p < 0.001). VEGF expression increased with increasing expression of TNF-alpha (p < 0.001). Renal function in first 6 months after initial biopsy was better in patients with marked tubular VEGF expression (p < 0.01); however, in follow-up, development of IF and graft loss was found earlier in these patients (p < 0.01 and p < 0.05, respectively). Increased renal VEGF expression has protective properties immediately following renal allograft but allows for increased risk of early IF, and therefore poor graft outcome in the long term.