Although granulomatous interstitial nephritis (GIN) is a rare histological finding in kidney transplants, the joint occurrence of GIN and focal segmental glomerulosclerosis (FSGS) has not, to our knowledge, been reported in the literature. We report a case of GIN and de novo FSGS in kidney transplant recipients leading to allograft failure. A 69-year-old male with a history of end-stage renal disease (ESRD) of unknown etiology, as well as liver failure from hepatitis B and C co-infection, initially had a living unrelated kidney transplant (LURT) in 2007 and subsequently received both liver and kidney transplants (SLKTs) in 2017. His second post-transplant course in 2017 was complicated by antibody-mediated rejection, recurrent urinary tract infections, and an episode of cell-mediated rejection, which was treated with both corticosteroids and thyroglobulin. In 2023, his serum creatinine remained stable, ranging from 2.2 to 2.9 mg/dL, with maintenance immunosuppression of mycophenolate mofetil (750 mg twice a day), tacrolimus (4 mg twice a day; target of 5-7 ng/mL), and prednisone (5 mg daily). In February 2024, his serum creatinine increased to 4.3 mg/dL, with nephrotic-range proteinuria (urine protein-to-creatinine ratio of 6000 mg/g) and urinalysis showing pyuria (white blood cell count of 49), but no hematuria. All infectious work-ups, including urine culture, blood culture, QuantiFERON-TB Gold, and sputum Mycobacterium tuberculosis polymerase chain reaction (MTB-PCR) (×3), were negative. An allograft biopsy showed acute granulomatous tubulo-interstitial nephritis, along with de novo collapsing FSGS and recurrent diabetic nephropathy. There was no evidence of active T-cell-mediated, vascular, or antibody-mediated rejection (negative C4d). The kidney biopsy for in-tissue MTB-PCR testing was negative. To the best of our knowledge, our patient is the first case of idiopathic GIN with non-necrotizing granulomata, along with de novo collapsing FSGS, leading to allograft failure.