Accurate diagnosis and grading of rejection and other pathological processes are of paramount importance to guide therapeutic interventions in patients with pancreas allograft dysfunction. A multi-disciplinary panel of pathologists, surgeons and nephrologists was convened for the purpose of developing a consensus document delineating the histopathological features for diagnosis and grading of rejection in pancreas transplant biopsies. Based on the available published data and the collective experience, criteria for the diagnosis of acute cell-mediated allograft rejection (ACMR) were established. Three severity grades (I/mild, II/moderate and III/severe) were defined based on lesions known to be more or less responsive to treatment and associated with better- or worse-graft outcomes, respectively. The features of chronic rejection/graft sclerosis were reassessed, and three histological stages were established. Tentative criteria for the diagnosis of antibody-mediated rejection were also characterized, in anticipation of future studies that ought to provide more information on this process. Criteria for needle core biopsy adequacy and guidelines for pathology reporting were also defined. The availability of a simple, reproducible, clinically relevant and internationally accepted schema for grading rejection should improve the level of diagnostic accuracy and facilitate communication between all parties involved in the care of pancreas transplant recipients.