Chronic allograft dysfunction (CAD) is a major factor that hinders kidney transplant survival in the long run. Epithelial–mesenchymal transition (EMT) has been confirmed to significantly contribute to interstitial fibrosis/tubular atrophy (IF/TA), which is the main histopathological feature of CAD. Aberrant expression of the regulator of calcineurin 1 (RCAN1), recognized as an endogenous inhibitor of the calcineurin phosphatase, has been shown to be extensively involved in various kidney diseases. However, it remains unclear how RCAN1.4 regulates IF/TA formation in CAD patients. Herein, an in vivo mouse renal transplantation model and an in vitro model of human renal tubular epithelial cells (HK-2) treated with tumor necrosis factor-α (TNF-α) were employed. Our results proved that RCAN1.4 expression was decreased in vivo and in vitro, in addition to the up-regulation of Yin Yang 1 (YY1), a transcription factor that has been reported to convey multiple functions in chronic kidney disease (CKD). Knocking in of RCAN1.4 efficiently attenuated chronic renal allograft interstitial fibrosis in vivo and inhibited TNF-α-induced EMT in vitro through regulating anti-oxidative stress and the calcineurin/nuclear factor of activated T cells cytoplasmic 1 (NFATc1) signaling pathway. In addition, suppression of YY1 mediated by shRNA or siRNA alleviated TNF-α-induced EMT through abolishing reactive species partly in an RCAN1.4-dependent manner. Notably, we confirmed that YY1 negatively regulated RCAN1.4 transcription by directly interacting with the RCAN1.4 promoter. In addition, histone deacetylase 2 (HDAC2) interacted with YY1 to form a multi-molecular complex, which was involved in TNF-α-induced RCAN1.4 transcriptional repression. Therefore, RCAN1.4 is suggested to be modulated by the YY1/HDAC2 transcription repressor complex in an epigenetic manner, which is a mediated nephroprotective effect partly through modulating O2⋅− generation and the calcineurin/NFATc1 signaling pathway. Thus, the YY1–RCAN1.4 axis constitutes an innovative target for IF/TA treatment in CAD patients.