Graves' disease (GD) is an autoimmune disorder with genetic predisposition. Interferon-gamma (IFN-gamma) is an important mediator of inflammatory and immune responses. The aim of the present study was to investigate whether the polymorphism of IFN-gamma gene is associated with the development of GD or with clinical course during the antithyroid drug therapy. We have studied the CA repeat polymorphisms in the first intron of IFN gamma gene in Japanese patients with GD (n = 162) and healthy control subjects without antithyroid autoantibodies or family history of autoimmune disorders (n = 133). There was no difference in allele frequency of IFN-gamma gene polymorphism between patients with GD and control subjects. However, the allele 4 (15 CA repeats) frequency was significantly greater in patients whose antithyrotropin receptor antibody (TRAb) became negative within 3 years by antithyroid drug treatment than those with consistently positive TRAb for more than 3 years (34.1% vs. 15.7%, chi2 = 8.545, p = 0.0035, pc = 0.049). The in vitro production of IFN-gamma by concanavalin A-stimulated peripheral blood mononuclear cells was significantly smaller in control subjects with the allele 4 compared to those with the other alleles. In conclusions, the CA repeat polymorphism of the IFN-gamma gene might be associated with the outcome of anti-thyroid drug treatment.