In autoimmune thyroid disease, thyroid epithelial cells (TEC) express major histocompatibility complex (MHC) class II molecules, potentially enabling them to present thyroid self-antigens to CD4-positive T cells. However, despite this, TEC may fail to present endogenous antigen as a result of limited processing or MHC class II loading capacity, or inadequate MHC class II levels. We addressed these issues using the cloned rat TEC line, Fischer rat thyroid cell line (FRTL5), which was transfected using an adenoviral expression vector that expressed ovalbumin (OVA) as an integral membrane protein. OVA-expressing FRTL5 cells very efficiently activated a panel of OVA-specific, class II-restricted T-cell hybridomas. This response was dependent on induction of MHC class II molecules by interferon-gamma (IFN-gamma) and was blocked by anti-MHC class II antibodies. Poor responses were seen to exogenously added OVA or OVA peptides. These results provide the most direct evidence to date that TEC can form MHC class II-peptide complexes derived from self-antigen in sufficient quantities to activate T cells.