Death with a functioning graft and death‐censored renal allograft failure remain major problems for which effective preventative protocols are lacking. The retrospective cohort study aimed to determine whether histologic changes on a 5‐year surveillance kidney biopsy predict adverse outcomes after transplantation in recipients who had: both Type 2 diabetes (T2DM) and obesity (BMI ≥ 30 kg/m2) at the time of transplantation (T2DM/Obesity, n = 75); neither (No T2DM/No obesity, n = 78); No T2DM/Obesity (n = 41), and T2DM/No obesity (n = 47). On 5‐year biopsies, moderate‐to‐severe mesangial expansion was more common in the T2DM/Obesity group (Banff mm score ≥2 = 49.3%; Tervaert classification MS ≥ 2b = 26.7%) compared to the other groups (p < .001 for both scores). Risk factors included older age, higher BMI, HbA1C, and triglycerides at 1‐year post‐transplant. Moderate‐to‐severe mesangial expansion correlated with death with function (HR 1.74 (1.01, 2.98), p = .045 Banff and 1.89 (1.01, 3.51) p = .045 Tervaert) and with death‐censored graft loss (HR 3.2 (1.2, 8.8), p = .02 Banff and HR 3.8 (1.3, 11.5), p = .01 Tervaert) over a mean of 11.6 years of recipient follow‐up post‐transplant. These data suggest that mesangial expansion in recipients with T2DM and obesity may reflect systemic vascular injury and might be a novel biomarker to predict adverse outcomes post renal transplant.