The immunoregulatory influence of transforming growth factor beta (TGF beta) was studied in patients with Graves' disease and in normal controls. Special attention was given to determine how TGF beta affects the interaction between thyroid epithelial cells and T lymphocytes. Human recombinant TGF beta 1 (rTGF beta 1) was immunosuppressive in patients with Graves' disease and in controls. In both groups it inhibited the proliferation of peripheral blood mononuclear cells and of peripheral and thyroid derived T cell lines and clones in response to non-specific stimuli. It also decreased the number of serine esterases expressing cytotoxic T cells and suppressed the recognition of thyroid epithelial cells by thyroid autoantigen specific T cell clones. Inhibition of autoantigen recognition was not only observed when rTGF beta 1 was added to the thyroid epithelial cell/lymphocyte co-culture, but was also found when thyroid epithelial cells were preincubated with rTGF beta 1, which was then removed before the initiation of co-culture. This was probably as a result of a decrease in the antigenicity of the target cells, as rTGF beta 1 also suppressed thyroid peroxidase as well as HLA class II autoantigen expression, in cultured thyroid epithelial cells. These results demonstrate that TGF beta may exert a variety of down-regulatory influences in Graves' disease. It may be of importance for the suppression of autoaggression in persons predisposed to autoimmunity; may be quantitatively overrun by immunostimulatory influences in the acute phase of the disease; and may be important for the induction of remission in patients with Graves' disease.