Background. Bending the cost curve in medical expenses is a high national priority. The relationship between cost and kidney allograft failure has not been fully investigated in the United States. Methods. Using Medicare claims from the United States Renal Data System, we determined costs for all adults withMedicare coverage who underwent kidney transplant January 1, 2007, to June 30, 2009.We compared relative cost (observed/expected payment) for year 1 after transplantation for all transplant centers, adjusting for recipient, donor, and transplant characteristics, region, and local wage index. Using program-specific reports fromthe Scientific Registry of Transplant Recipients, we correlated relative cost with observed/expected allograft failure between centers, excluding small centers. Results. Among 19,603 transplants at 166 centers, mean observed cost per patient per center was $65,366 (interquartile range, $55,094-$71,624). Mean relative cost was 0.99 (±0.20); mean observed/expected allograft failure was 1.03 (±0.46). Overall, there was no correlation between relative cost and observed/expected allograft failure (r = 0.096, P = 0.22). Comparing centers with higher than expected costs and allograft failure rates (lower performing) and centers with lower than expected costs and failure rates (higher-performing) showed differences in donor and recipient characteristics. As these characteristics were accounted for in the adjusted cost and allograft failuremodels, they are unlikely to explain the differences between higher-and lower-performing centers. Conclusions. Further investigations are needed to determine specific cost-effective practices of higher-and lower-performing centers to reduce costs and incidence of allograft failure.