Antithymocyte globulin (ATG) and muromonab CD3 (OKT3) are currently the only antilymphocyte preparations that are commercially available for induction immunosuppressive therapy for renal allograft transplantation in the US. ATG, in the usually prescribed doses, is more expensive than muromonab CD3, but muromonab CD3 is associated with more severe adverse effects that may affect clinical outcome and overall cost. We performed a retrospective study of all adult recipients of a first cadaveric renal allograft, who underwent transplantation between January 1991 and December 1994 who received either ATG (n = 92) or muromonab CD3 (n = 91) for induction therapy at our transplant centre. The average age of recipients was older (50 vs 44 yrs; p = 0.001) and extended donors were more commonly used in the ATG group (41 vs 13%; p = 0.0001) compared with the muromonab CD3 group. Nevertheless, at 1 year post-transplant, The incidence of rejection was lower (34 vs 47%) and graft survival was better (93 vs 85%; p = 0.03) in the ATG group. Patients who received ATG were discharged earlier (9.4 vs 13.3 days; p = 0.0001) and had similar serum creatinine levels on the day of discharge (2.4 ± 1.5 vs 2.1 ± 1.1 mg/dl; p = 0.25). Overall, the 1-year hospitalisation costs of transplantation and readmissions were similar [$US39937 ± 17014 vs $US42850 ± 20923 (currency year 1994); p = 0.22]. This is the first comparison of ATG and muromonab CD3 in renal transplant recipients to consider clinical as well as economic outcomes. For renal transplant patients in whom induction therapy is used at our centre, the initial expense of ATG can be justified by improved graft survival, fewer rejection episodes, and shorter hospital stays which are associated with similar overall transplantation costs.