Antilymphocyte globulin (ALG) has been advocated for the treatment of renal transplant rejection episodes in patients maintained on prednisone and azathioprine. Treatment with steroids (outpatient) is considerably less expensive than with ALG (inpatient), so we studied whether routine ALG was necessary. Between 3/82 and 11/83, 54 cadaver transplant recipients maintained on prednisone and azathioprine who developed a first rejection episode were randomized to receive–for treatment of their first, and if necessary second, rejection– methylprednisolone (MP) plus ALG (n = 24), or MP alone, with ALG added if treatment failed (n = 30). Treatment failure was defined as continuing deterioration on 131 iodohippuran scan, rising serum creatinine level, or lack of improvement within 7 days. There was no significant difference in patient survival, graft survival, mean number of rejections, and infection rate between the two groups: 60% (18/30) of first and 50% (10/10) of second rejection episodes responded to MP alone. We conclude that patients are not penalized by initial rejection treatment with MP. Many rejection episodes respond to steroids alone; elimination of routine ALG use will save hospitalization time and expense.