Chronic allograft vasculopathy (CAV) remains a major obstacle for long-term survival of grafts even though therapeutic strategies have improved considerably in recent years. CAV is characterized by concentric and diffuse neointimal formation, medial apoptosis, infiltration of lymphocyte or inflammatory cells, and deposition of extracellular matrix both in arteries and veins. Recent studies have shown that stem cells derived from the recipient contribute to neointimal formation under the regulation of chemokines and cytokines. Arterial remodeling in allografts eventually causes ischemic graft failure. The pathogenesis is multi-factorial with both immunologic and non-immunological factors being involved. The immunological factors have been discussed extensively in other articles. This review focuses mainly on the arterial remodeling that occurs in 3 layers of vessel walls including intimal injury, accumulation of smooth muscle-like cells in the neointimal, medial smooth muscle cell apoptosis, adventitial fibrosis, and deposition of extracellular matrix.