An idiopathic capillary leak syndrome (“engraftment syndrome”) often occurs in recipients of hematopoietic cells, manifested clinically by transient azotemia and sometimes fever and fluid retention. Here we report the renal pathology in 10 recipients of combined bone marrow and kidney allografts. Nine developed graft dysfunction on day 10–16 and renal biopsies showed marked acute tubular injury, with interstitial edema, hemorrhage and capillary congestion, with little or no interstitial infiltrate (≤10%) and marked glomerular and peritubular capillary (PTC) endothelial injury and loss by electron microscopy. Two had transient arterial endothelial inflammation; and 2 had C4d deposition. The cells in capillaries were primarily CD68+MPO+ mononuclear cells and CD3+CD8+ T cells, the latter with a high proliferative index (Ki67+). B cells (CD20+) and CD4+ T cells were not detectable, and NK cells were rare. XY FISH showed that CD45+ cells in PTCs were of recipient origin. Optimal treatment remains to be defined; two recovered without additional therapy, six were treated with anti-rejection regimens. Except for one patient, who later developed thrombotic microangiopathy and one with acute humoral rejection, all fully recovered within 2–4 weeks. Graft endothelium is the primary target of this process, attributable to as yet obscure mechanisms, arising during leukocyte recovery.