Acute rejection is the most common reason of graft failure after kidney transplantation, and early detection is crucial to survive the transplanted kidney function. In this paper we introduce a new approach for the automatic classification of normal and acute rejection transplants from Dynamic Contrast Enhanced Magnetic Resonance Imaging (DCE-MRI). The proposed algorithm consists of three main steps; the first step isolates the kidney from the surrounding anatomical structures. In the second step, a novel nonrigid-registration algorithm is employed to account for the motion of the kidney due to patient breathing, and finally, the perfusion curves that show the transportation of the contrast agent into the tissue are obtained from the cortex and used in the classification of normal and acute rejection transplants. Applications of the proposed approach yield promising results.