Follicular lymphoma (FL) is a common, indolent lymphoma, and patients with FL typically have a good prognosis. However, they may experience histological transformation into aggressive large B-cell lymphoma. We conducted a nationwide population-based study to estimate the risk of transformation in FL, considering different FL grades, and studied the relative survival (RS) of patients diagnosed with FL in Finland from 1995 to 2018. We identified a total of 4014 patients with newly diagnosed grade 1–3A FL. The median age at diagnosis was 64 years, and 55% of patients were female. The cumulative incidence of transformation across the entire cohort was 8.4% at 10 years (95% confidence interval [CI], 7.5–9.5). The 10-year RS was 78% for the whole cohort and showed improvement over time. Transformation was associated with a significantly increased risk of death (hazard ratio [HR] 5.0; 95% CI, 4.2–6.0; p < 0.001). Grade 3A was associated with higher excess mortality compared to patients with low-grade FL. Lymphoma was the most common cause of death. We conclude that, although the 10-year RS was relatively good, grade 3A FL and transformation led to significantly higher mortality compared to low-grade FL or no transformation. Our results also indicate a reduction in excess mortality over time.