Recent advances in corneal graft technology, including donor tissue retrieval, storage and surgical techniques, have greatly improved the clinical outcome of corneal grafts. Despite these advances, immune mediated corneal graft rejection remains the single most important cause of corneal graft failure. Several host factors have been identified as conferring a "high risk" status to the host. These include: more than two quadrant vascularisation, with associated lymphatics, which augment the afferent and efferent arc of the immune response; herpes simplex keratitis; uveitis; silicone oil keratopathy; previous failed (rejected) grafts; "hot eyes"; young recipient age; and multiple surgical procedures at the time of grafting. Large grafts, by virtue of being closer to the host limbus, with its complement of vessels and antigen-presenting Langerhans cells, also are more susceptible to rejection. The diagnosis of graft rejection is entirely clinical and in its early stages the clinical signs could be subtle. Graft rejection is largely mediated by the major histocompatibility antigens, minor antigens and perhaps blood group ABO antigens and some cornea-specific antigens. Just as rejection is mediated by active immune mediated events, the lack of rejection (tolerance) is also sustained by active immune regulatory mechanisms. The anterior chamber associated immune deviation (ACAID) and probably, conjunctiva associated lymphoid tissue (CALT) induced mucosal tolerance, besides others, play an important role. Although graft rejection can lead to graft failure, most rejections can be readily controlled if appropriate management is commenced at the proper time. Topical steroids are the mainstay of graft rejection management. In the high-risk situations however, systemic steroids, and other immunosuppressive drugs such as cyclosporin and tacrolimus (FK506) are of proven benefit, both for treatment and prevention of rejection.