We performed a randomized prospective trial comparing calcineurin inhibitor (CNI)-free to CNI-based immunosuppression to determine the impact on renal function, structure and gene expression. Sixty-one kidney recipients treated with basiliximab mycophenolate mofetil (MMF) and prednisone (P) were randomly assigned to concentration-controlled sirolimus or cyclosporine. Two years post-transplant 55 patients underwent renal function studies, 48 (87%) underwent transplant biopsies; all classified by Banff scoring and 41 by DNA microarrays. Comparing sirolimus/MMF/P to cyclosporine/MMF/P there was a significantly lower serum creatinine (1.35 vs. 1.81 mg/dL; p = 0.008), higher Cockroft-Gault glomerular filtration rate (GFR) (80.4 vs. 63.4 mL/min; p = 0.008), iothalamate GFR (60.6 vs. 49.2 mL/min; p = 0.018) and Banff 0 (normal) biopsies (66.6 vs. 20.8%; p = 0.013). Regression analysis of calculated GFRs from 1 to 36 months yielded a positive slope for sirolimus of 3.36 mL/min/year, and a negative slope for cyclosporine of -1.58 mL/min/year (p = 0.008). Gene expression profiles from kidneys with higher Banff chronic allograft nephropathy (CAN) scores confirmed significant up-regulation of genes responsible for immune/inflammation and fibrosis/tissue remodeling. At 2 years the sirolimus-treated recipients have better renal function, a diminished prevalence of CAN and down-regulated expression of genes responsible for progression of CAN. All may provide for an alternative natural history with improved graft survival.