Chronic renal allograft dysfunction (CAD) is a major limiting factor of long-term graft survival. The hallmarks of progressive CAD are interstitial fibrosis and tubular atrophy (IFTA). MicroRNAs are small, regulatory RNAs involved in many immunological processes. In particular, microRNA-21-5p (miR-21) is considered to be strongly associated with pathogenesis regarding tubulointerstitium. The aim of this study was to assess urinary miR-21 expression levels in the kidney transplant recipients and determine their application in the evaluation of IFTA and kidney allograft function. The expression levels of miR-21 were quantified in the urine of 31 kidney transplant recipients with biopsy-assessed IFTA (IFTA 0 + I: n = 17; IFTA II + III: n = 14) by real-time quantitative PCR. Urine samples were collected at the time of protocolar biopsies performed 1 or 2 years after kidney transplantation. MicroRNA-191-5p was used as reference gene. MiR-21 was significantly up-regulated in IFTA II + III group compared to IFTA 0 + I group (p = 0.003). MiR-21 correlated significantly with serum concentration of creatinine (r = 0.52, p = 0.003) and eGFR (r = −0.45; p = 0.01). ROC analysis determined the diagnostic value of miR-21 with an area under curve (AUC) of 0.80 (p = 0.0002), sensitivity of 0.86 and specificity of 0.71. miR-21 is associated with renal allograft dysfunction and IFTA. Therefore, it could be considered as a potential diagnostic, non-invasive biomarker for monitoring renal graft function.