Merritt, who had recorded his greatest win in the same stadium in 2012 when he took Olympic gold, had looked good for a medal.
The 31-year-old American, world record holder in the event, finished outside the medals in fifth in a race won by the man who succeeded him as Olympic champion last year, Jamaica's Omar McLeod.
Defending champion Sergey Shubenkov took silver as an Authorised Neutral Athlete, Russia being still banned as a nation from competing because of the doping scandal, and Hungarian Balazs Baji a surprising bronze.
Merritt, who had recorded his greatest win in the same stadium in 2012 when he took Olympic gold, had looked good for a medal until two hurdles from the finish but it didn't matter a jot to him.
"Of course it feels like a victory," said Merritt.
"I am not meant to even be running so to be here in the final is a blessing."
"I've only been back in top competition for a year (he narrowly failed to make the American Olympic team last year finishing fourth in the national trials), finished and have put in some good performances."
Merritt, who had been in sparkling shape coming into the championships having won at the same stadium at last month's Diamond League meeting, underwent the transplant from his older sister LaToya just days after winning the bronze at the 2015 world championships in Beijing.
He had first been diagnosed with the rare congenital kidney disease called collapsing focal segmental glomerulosclerosis (FSGS) in 2013.
At one point LaToya was even prepared to terminate her pregnancy so she could donate her kidney. Merritt's condition improved sufficiently to make that drastic gesture superfluous and she gave birth to Lela.
"She and my mum were in the stadium tonight which makes it extra special as without LaToya I wouldn't even have had the chance to run again," said Merritt.
"Of course it would have been great to win a medal in front of them but, hey, I had a bad day."
"I'm not the only champion athlete to have suffered that here. Usain Bolt got a bronze (in the men's 100 metres) and Elaine Thompson didn't even medal."
"There've been a lot of results that haven't been the norm here and that is because there are a lot of new faces coming through and changing things around."
"That can be only good for the sport."
Merritt, who had to be operated on twice in 2015 firstly the transplant and then to have the kidney inserted deeper inside him as it was causing him pain when he tried to hurdle, had no doubts that he would return to the podium again in the future.
"I'm not in any pain, I just didn't execute tonight," he said.
"But it's definitely possible for me to medal in the future."
"Everyone in the hurdling game is hurdling well."
"Since I broke the world record it's really transformed."
"There are a lot of new people and new talent, and that's fine. I'm just happy still to be part of it."
Merritt, whose mother brought him and his sister up in a tough neighbourhood of Atlanta on her own, had no problem with Shubenkov being in the race.
"He is definitely a great hurdler," said Merritt.
"I can't speak on Russia although obviously some athletes have been doping but he is clean and isn't one of them."