Although kidney transplantation has been an important means for the treatment of patients with end stage of renal disease, the long-term survival rate of the renal allograft remains a challenge. The cause of late renal allograft loss, once known as chronic allograft nephropathy, has been renamed "interstitial fibrosis and tubular atrophy" (IF/TA) to reflect the histologic pattern seen on biopsy. The mechanisms leading to IF/TA in the transplanted kidney include inflammation, activation of renal fibroblasts, and deposition of extracellular matrix proteins. Identifying the mediators and factors that trigger IF/TA may be useful in early diagnosis and development of novel therapeutic strategies for improving long-term renal allograft survival and patient outcomes. In this review, we highlight the recent advances in our understanding of IF/TA from three aspects: pathogenesis, diagnosis, and treatment.