Introduction Urine cytology is often used to screen for polyomavirus in renal transplant patients. There are qualitative cytologic differences between urine from transplant and nontransplant patients, particularly the presence of epithelial cell clusters, that can pose diagnostic difficulty. Materials and methods Voided urine cytology specimens from 100 renal transplant patients and 100 nontransplant patients were reviewed for cell clusters. Immunocytochemistry for renal cell carcinoma marker (RCC) and cytokeratin 7 was performed on 10 recent specimens. Clinical data was reviewed with a focus on evidence of graft dysfunction or malignancy. Results Eighteen patients (18%) in the renal transplant group and no nontransplanted patients (0%) exhibited cell clusters with characteristic morphology: 3-dimensional cohesive groups; high nucleus-to-cytoplasm ratio; round, eccentrically placed nuclei with a prominent central nucleolus; and granular or vacuolated cytoplasm. Some had significant nuclear atypia. The groups were RCC–positive in 8 of 10 cases, and cytokeratin 7–positive in 6 of 10 cases, which is consistent with renal tubular epithelial clusters (RTECs). Clinical follow-up revealed that 88% (15 of 17) of those with RTECs developed graft dysfunction in a median of 65 days, compared with 6% (4 of 64) without RTECs (sensitivity 79%, specificity 97%, positive predictive value 88%, negative predictive value 94%). No patient developed a urinary tract malignancy. Conclusions RTECs are relatively common in urine cytology from transplant patients, but are rare in other urine specimens. Recognition is important as they can be mistaken for urothelial carcinoma or adenocarcinoma. There appears to be a strong association with later development of graft dysfunction. These cells are most likely evidence of renal tubular injury secondary to a variety of factors, including rejection.