OBJECTIVE After an initially successful islet cell transplantation, a number of patients return to C-peptide negativity, and therefore immunosuppressive therapy is discontinued. Some are then found to have developed Graves disease. We examined the risk of Graves disease after immunosuppression. RESEARCH DESIGN AND METHODS Immunosuppressive therapy was stopped in 13 type 1 diabetic islet cell recipients who had received one course of antithymocyte globulin and maintenance doses of mycophenolate mofetil and a calcineurin inhibitor. None had a history of thyroid disease. RESULTS In four patients, clinical Graves hyperthyroidism was observed within 21 months after discontinuation and 30–71 months after the start of immunosuppressive therapy. All four patients exhibited a pretransplant positivity for thyroid peroxidase (TPO) autoantibodies, while the nine others were TPO negative pre- and posttransplantation. CONCLUSIONS Type 1 diabetic recipients of islet cell grafts with pretransplant TPO autoantibody positivity exhibit a high risk for developing Graves hyperthyroidism after immunosuppressive therapy is discontinued for a failing graft.