It is unclear whether alloreaction develops in peripheral lymphoid organs and effector cells being recruited to the target organs, or the entire process of alloreaction can happen within the transplanted kidneys. Interstitial inflammatory cell (IIC) proliferation was evaluated by MIB-1 antigen immunostain and the rate expressed as positive cells/1000 cells. This rate was higher in acute cell-mediated rejection (ACR) (25.7, n = 14) compared with normal kidney (0.4, n = 8), acute tubular necrosis (1.2, n = 8), chronic allograft nephropathy (CAN, 2.4, n = 20), and native kidneys with diverse diseases (9.2, n = 63); but was comparable to that in CAN with significant IIC (20.6, n = 16). 10.1% and 8.3% of T lymphocytes underwent proliferation in ACR with or without CAN, whereas only rare B lymphocytes or macrophages showed this change (< 1.2%), regardless of diagnostic categories. All biopsies diagnosed as ACR in conjunction with a high rate of MIB-1 + IIC and 9/12 biopsies with CAN and significant IIC in which ACR was diagnosed due to a high rate of MIB-1 + IIC, responded to anti-rejection therapy. Proliferation of IIC involves predominantly T lymphocytes. These observations provide support for the concept of in situ alloimmunization, and facilitate the diagnosis of ACR.