Despite tacrolimus (TAC) drug-level monitoring, TAC-induced chronic renal allograft fibrosis remains an important problem. This study investigated the potential of urinary neutrophil gelatinase-associated lipocalin (uNGAL) as a chronic renal allograft fibrosis biomarker in a two-phase study (proof of concept and cohort). In the proof of concept stage of the study, increased TAC-doses at 3 days after dose adjustment compared with the baseline were associated with elevated uNGAL (+ΔuNGAL) and urinary interleukin 18 (IL-18), but normal serum creatinine (SCr), despite the therapeutic trough levels of TAC. In the cohort study, the patients with elevated uNGAL post-recruitment in comparison with the baseline (+ΔuNGAL) was associated with the more severe renal allograft fibrosis from renal pathology of the protocol biopsy at 12 months post kidney transplantation (post-KT). A cut-off value of uNGAL ≥ 125.2 ng/mL during a 3, 6, 9 and 12 months post-KT was associated with a higher fibrosis score, with an area under the receiver operating characteristics curve of 0.80 (95% confidence interval [CI] 0.72 to 0.88, p < 0.0001) and a hazard ratio (HR) of 2.54 (95% CI 1.45 to 9.33; p < 0.001). We conclude that uNGAL is a sensitive biomarker of TAC induced subtle renal injury and TAC-induced chronic renal allograft fibrosis. We propose that uNGAL measurements, in addition to trough levels of TAC, should be used to predict TAC-induced chronic renal allograft fibrosis in the recipients of KT.