The role of alemtuzumab as an immunosuppressive agent is evolving. We conducted a prospective randomized trial comparing alemtuzumab and rabbit anti-thymocyte globulin (rATG) induction in adult kidney and pancreas transplantation using similar maintenance immunosuppression. Between February 1, 2005 and June 15, 2006 (median follow-up six months), 98 patients were randomized either to alemtuzumab (n = 48) or to rATG (n = 50) induction; 77 (79%) underwent kidney alone (KA) transplant, 17 (17%) pancreas-kidney transplant, and four (4%) pancreas after kidney transplant. Of 77 KA transplants, 66 (86%) were from deceased donors and 31 (40%) from expanded criteria donors (ECD). Re-transplantation, HLA-match, antibody titer, ECD, race, cytomegalovirus status, steroid use, delayed graft function, preservation time, and immunological risk were similar between the two induction groups. Patient, kidney, and pancreas graft survival rates were 100%, 96%, and 95%, respectively. Survival, initial length of stay, delayed graft function, and overall acute rejection rates were similar between alemtuzumab and rATG groups, but acute rejection occurred in nine (20%) rATG patients compared with zero (0%) alemtuzumab patients who received KA transplants (p = 0.007). Mean induction costs differed in the alemtuzumab ($1474) and rATG ($4996, p < 0.001) groups. In the short term after kidney and pancreas transplantation, alemtuzumab and rATG induction therapies are similarly safe and effective.