INTRODUCTION We carried out an analysis of the United States Renal Data System to determine the incidence, risk factors, prognosis, and costs associated with the diagnosis of renal cell carcinoma (RCC) after kidney transplantation. METHODS This is a retrospective cohort of 40,821 Medicare primary renal transplant recipients transplanted from January 1, 2000, to July 1, 2005, and followed up till December 31, 2005, excluding those with prior RCC or nephrectomy. Kaplan-Meier analysis was performed to determine the time of occurrence of RCC, and Cox regression was used to determine factors associated with RCC. RESULTS Three hundred sixty-eight patients were diagnosed with RCC within 3 years after transplant (incidence of 3.16 per 1000 person years). The 3-year incidence of RCC posttransplant was 9.29 per 1000 person years (2.3%) for those with pretransplant cysts and 3.08 per 1000 person years (0.7%) without pretransplant cysts. RCC was diagnosed disproportionately early posttransplant in patients with cysts. Cysts were independently associated with increased risk of RCC, as was male gender, older recipient, donor age, African American recipient, increased time on dialysis and acute rejection within first year posttransplant. RCC was associated with increased risk of mortality with a higher risk with pretransplant cysts. Patients who developed RCC had higher cumulative median costs ($55,456 at 2 years) than those who did not develop RCC ($40,369). There was no "clustering" of RCC in individual states or centers more than would be expected by chance. CONCLUSION RCC was diagnosed disproportionately early in patients with pretransplant renal cysts and was associated with a worse prognosis and increased costs.