We describe factors associated with immunosuppression compliance after kidney transplantation and examine relationships between compliance with allograft outcomes and costs. Medicare claims for immunosuppression in 15 525 renal transplant recipients with at least 1 year of graft function were used to calculate compliance as medication possession ratio. Compliance was categorized by quartiles as poor, fair, good and excellent. We modeled adjusted associations of clinical factors with the likelihood of persistent compliance by multiple logistic regressions (aOR), and estimated associations of compliance with subsequent graft and patient survival with Cox proportional hazards (aHR). Adolescent recipients aged 19-24 years were more likely to be persistently noncompliant compared to patients aged 24-44 years (aOR 1.49 [1.06-2.10]). Poor (aHR 1.80 [1.52-2.13]) and fair (aHR 1.63[1.37-1.93]) compliant recipients were associated with increased risks of allograft loss compared to the excellent compliant recipients. Persistent low compliance was associated with a $12 840 increase in individual 3-year medical costs. Immunosuppression medication possession ratios indicative of less than the highest quartile of compliance predicted increased risk of graft loss and elevated costs. These findings suggest that interventions to improve medication compliance among kidney transplant recipients should emphasize the benefits of maximal compliance, rather than discourage low compliance.