Graves' disease (GD) is a systemic autoimmune disease which targets the thyroid, orbit, and skin. Thyroid-associated ophthalmopathy (TAO) refers specifically to the orbital and periorbital manifestations of GD. Several important concepts have emerged from our enhanced understanding of the molecular mechanisms of the disease. Considerable debate remains concerning the specific identity and roles of inflammatory T-cell subsets, soluble and contact-mediated signalling, and autoantigens driving TAO. However B and T lymphocytes appear central in the process through production of disease mediators including activating autoantibodies to the thyrotropin receptor and insulin-like growth factor-1 receptor; cytokines including IL-1beta, IL-6, and IL-16; and chemokines including RANTES. Many of these molecules appear central to the inflammation, accumulation of extracellular matrix macromolecules, and fibrosis in the disease. Novel therapeutics targeting other autoimmune diseases may provide an opportunity for disrupting disease pathogenesis. It is imperative that agents targeting B-and T-cell functions be further evaluated in the treatment of aggressive forms of TAO utilizing multicenter clinical trials that allow adequate statistical power and sample size.