Thyroid-stimulating IgG from Graves' patients bind to the TSH receptor and activate both adenylyl cyclase (AC) and phospholipase A2 (PLA2) in FRTL5 thyroid cells. Both activities have been associated with increased thyroid cell growth and function; evidence exists that subpopulations of Graves' IgG can stimulate either AC or PLA2 cascades and that the activation of both is associated with the largest goiters in patients. Studies using chimeras of the human TSHR receptor (hTSHR) and the LH-CG receptor show that most patients with Graves' disease have cAMP-stimulating IgG that require epitopes on the N-terminal portion of the TSHR extracellular domain; epitopes associated with PLA2 activation are not clear. To address this question we used stably transfected Chinese hamster ovary (CHO) cells containing the wild-type hTSHR and the hTSHR chimera with residues 8-165 (Mc1+2) substituted by equivalent residues of the LH-CG receptor. PLA2 activity, measured as arachidonic acid (AA) release, was determined in 32 patients with Graves' disease. We show that 72% of Graves' patients have IgG able to stimulate PLA2 in CHO cells transfected with the TSHR and that AA release induced by Graves' IgG was significantly reduced (P = 0.022) in the CHO-Mc1+2-transfected cells (193 +/- 88% vs. 131 +/- 67%, respectively). Unlike IgG, the effect of TSH was not modified in the CHO-Mc1+2-transfected cells. When we compared the AC- and PLA2-stimulating activities of these 32 IgG in wild-type TSHR transfectants, we found that 63% of Graves' patients have antibodies able to stimulate both PLA2 and AC, whereas some patients' IgG were active only in AC or PLA2 assays. Of the patients with IgG having activity in both assays in wild-type TSHR transfectants, 50% of the IgG lost their stimulatory activities in both AA release and cAMP assays in Mc1+2 cells. Of the remainder, some IgG maintained their activity in one (AA release) or the other (cAMP) assay when measured in Mc1+2 chimeras. Thus, our data show that the N-terminal portion of extracellular domain of the TSHR is required for PLA2 as well as AC activation by IgG from patients with Graves' disease. These data also demonstrate that patients with Graves' disease have heterogeneous autoantibodies that selectively activate AC and PLA2 pathways and suggest that patients with autoantibodies active in both assays have more severe disease, with higher thyroid hormone levels and larger goiters.