This is a case report of a 59 years old male who had a commercial non-related living renal transplantation for his end stage renal insufficiency secondary to adult polycystic kidney disease. He suffered an immediate and early post-operative bleeding, which was managed conservatively. He was presented at Sultan Qaboos University Hospital four months after his transplant with abdominal pain, nausea, loss of appetite and a rise in serum creatinine levels. Ultrasonography and angiography have shown a 4 cm false aneurysm of the transplant renal artery at the anastomotic site with the external iliac artery. Surgical exploration with resection of the false aneurysm and reanastomosis of the donor renal artery to the external iliac artery was carried out successfully with preservation of the renal allograft. This is a rare case of an extra-renal false aneurysm at the anastomotic site of the transplant renal artery to the external iliac artery four months after renal allotransplantation. Literature review on the management and outcome of false aneurysms after renal transplant was carried out.