A major challenge for kidney transplantation is balancing the need for immunosuppression to prevent rejection, while minimizing drug-induced toxicities. We used DNA microarrays (HG-U95Av2 GeneChips, Affymetrix) to determine gene expression profiles for kidney biopsies and peripheral blood lymphocytes (PBLs) in transplant patients including normal donor kidneys, well-functioning transplants without rejection, kidneys undergoing acute rejection, and transplants with renal dysfunction without rejection. We developed a data analysis schema based on expression signal determination, class comparison and prediction, hierarchical clustering, statistical power analysis and real-time quantitative PCR validation. We identified distinct gene expression signatures for both biopsies and PBLs that correlated significantly with each of the different classes of transplant patients. This is the most complete report to date using commercial arrays to identify unique expression signatures in transplant biopsies distinguishing acute rejection, acute dysfunction without rejection and well-functioning transplants with no rejection history. We demonstrate for the first time the successful application of high density DNA chip analysis of PBL as a diagnostic tool for transplantation. The significance of these results, if validated in a multicenter prospective trial, would be the establishment of a metric based on gene expression signatures for monitoring the immune status and immunosuppression of transplanted patients.