The implementation of surveillance biopsies in pediatric kidney transplantation remains controversial. Surveillance biopsies detect subclinical injury prior to clinical dysfunction, which could allow for early interventions that prolong allograft survival. We conducted a single-center retrospective cohort study of 120 consecutive pediatric kidney recipients, of whom 103 had surveillance biopsies ≤6 months posttransplant. We tested the hypothesis that subclinical inflammation (borderline or T cell–mediated rejection without clinical dysfunction) is associated with a 5-year composite endpoint of acute rejection and allograft failure. Overall, 36% of subjects had subclinical inflammation, which was associated with increased hazard for the composite endpoint (adjusted hazard ratio 2.89 [1.27, 6.57]; P <.01). Subjects with treated vs untreated subclinical borderline rejection had a lower incidence of the composite endpoint (41% vs 67%; P <.001). Subclinical vascular injury (subclinical inflammation with Banff arteritis score > 0) had a 78% incidence of the composite endpoint vs 11% in subjects with no major surveillance abnormalities (P <.001). In summary, we showed that subclinical inflammation phenotypes were prevalent in pediatric kidney recipients without clinical dysfunction and were associated with increased acute rejection and allograft failure. Once prospectively validated, our data would support implementation of surveillance biopsies as standard of care in pediatric kidney transplantation.