The management of an asymptomatic failed renal graft remains controversial. The aim of our study was to explore the effect of failed allograft nephrectomy on kidney retransplantation by comparing the outcome of recipients who underwent graft nephrectomy prior to retransplantation with those who did not. Retrospective comparison of patients undergoing kidney retransplantation with (group A, n = 121) and without (group B, n = 45) preliminary nephrectomy was performed, including subgroup analysis with reference to patients with multiple (≥2) retransplantations and patients of the European Senior Program (ESP). Nephrectomy leads to increased panel reactive antibody (PRA) levels prior to retransplantation and is associated with significantly increased rates of primary nonfunction (PNF; P = 0.05) and acute rejection (P = 0.04). Overall graft survival after retransplantation was significantly worse in group A compared with group B (P = 0.03). Among the subgroups especially ESP patients showed a shorter graft survival after previous allograft nephrectomy. On the multivariate analysis, pretransplant graft nephrectomy and PRA >70% were independent and significant risk factors associated with graft loss after kidney retransplantation. Nephrectomy of the failed allograft was not beneficial for retransplant outcome in our series. Patients with failed graft nephrectomy tended to have a higher risk of PNF and acute rejection after retransplantation. The possibility that the graft nephrectomy has a negative impact on graft function and survival after retransplantation is worth studying further.