Background: Few studies have assessed outcomes in transplant recipients with failing grafts as most studies have focused on outcomes after graft loss. Objective: To determine whether renal function declines faster in kidney transplant recipients with a failing graft than in people with chronic kidney disease of their native kidneys. Design: Retrospective cohort study. Setting: Alberta, Canada (2002-2019). Patients: We identified kidney transplant recipients with a failing graft (2 estimated glomerular filtration rate [eGFR] measurements 15-30 mL/min/1.73 m² ≥90 days apart). Measurements: We compared the change in eGFR over time (eGFR with 95% confidence limits, _LCLeGFR_UCL) and the competing risks of kidney failure and death (cause-specific hazard ratios [HRs], _LCLHR_UCL). Methods: Recipients (n = 575) were compared with propensity-score-matched, nontransplant controls (n = 575) with a similar degree of kidney dysfunction. Results: The median potential follow-up time was 7.8 years (interquartile range, 3.6-12.1). The hazards for kidney failure (HR_1.101.33_1.60) and death (HR_1.211.59_2.07) were significantly higher for recipients, while the eGFR decline over time was similar (recipients vs controls: _–2.60–2.27_–1.94 vs _–2.52–2.21_–1.90 mL/min/1.73 m² per year). The rate of eGFR decline was associated with kidney failure but not death. Limitations: This was a retrospective, observational study, and there is a risk of bias due to residual confounding. Conclusions: Although eGFR declines at a similar rate in transplant recipients as in nontransplant controls, recipients have a higher risk of kidney failure and death. Studies are needed to identify preventive measures to improve outcomes in transplant recipients with a failing graft.