Carnosine affords protection against oxidative and carbonyl stress, yet high concentrations of the carnosinase-1 enzyme may limit this. We recently reported that high urinary carnosinase-1 is associated with kidney function decline and albuminuria in patients with chronic kidney disease. We prospectively investigated whether urinary carnosinase-1 is associated with a high risk for development of late graft failure in kidney transplant recipients (KTRs). Carnosine and carnosinase-1 were measured in 24 h urine in a longitudinal cohort of 703 stable KTRs and 257 healthy controls. Cox regression was used to analyze the prospective data. Urinary carnosine excretions were significantly decreased in KTRs (26.5 [IQR 21.4–33.3] µmol/24 h versus 34.8 [IQR 25.6–46.8] µmol/24 h; p < 0.001). In KTRs, high urinary carnosinase-1 concentrations were associated with increased risk of undetectable urinary carnosine (OR 1.24, 95%CI [1.06–1.45]; p = 0.007). During median follow-up for 5.3 [4.5–6.0] years, 84 (12%) KTRs developed graft failure. In Cox regression analyses, high urinary carnosinase-1 excretions were associated with increased risk of graft failure (HR 1.73, 95%CI [1.44–2.08]; p < 0.001) independent of potential confounders. Since urinary carnosine is depleted and urinary carnosinase-1 imparts a higher risk for graft failure in KTRs, future studies determining the potential of carnosine supplementation in these patients are warranted.