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Supplemental Digital Content is available in the text., Background. Surveillance biopsies permit early detection of subclinical inflammation before clinical dysfunction, but the impact of detecting early subclinical phenotypes remains unclear. Methods. We conducted a single-center retrospective cohort study of 441 consecutive kidney transplant recipients between 2015 and 2018 with surveillance biopsies at 6 months post-transplant. We tested the hypothesis that early subclinical inflammation (subclinical borderline changes, T cell-mediated rejection, or microvascular injury) is associated with increased incidence of a composite endpoint including acute rejection and allograft failure. Results. Using contemporaneous Banff criteria, we detected subclinical inflammation in 31%, with the majority (75%) having a subclinical borderline phenotype (at least minimal inflammation with mild tubulitis [>i0t1]). Overall, subclinical inflammation was independently associated with the composite endpoint (adjusted hazard ratio, 2.88; 1.11-7.51; P = 0.03). The subgroup with subclinical borderline inflammation, predominantly those meeting the Banff 2019 i1t1 threshold, was independently associated with 5-fold increased hazard for the composite endpoint (P = 0.02). Those with concurrent subclinical inflammation and subclinical chronic allograft injury had worse outcomes. The effect of treating subclinical inflammation was difficult to ascertain in small heterogeneous subgroups. Conclusions. Subclinical acute and chronic inflammation are common at 6 months post-transplant in kidney recipients with stable allograft function. The subclinical borderline phenotype with both tubulitis and interstitial inflammation was independently associated with poor long-term outcomes. Further studies are needed to elucidate the role of surveillance biopsies for management of allograft inflammation in kidney transplantation.