Class II major histocompatibility complex (MHC) antigens have been demonstrated on the surface of thyroid epithelial cells (thyrocytes) from patients with autoimmune thyroid disease. The present study was designed to investigate how the expression of class II MHC antigens is involved in autoimmune processes in Graves' disease by studying cellular interactions among thyrocytes, lymphocytes within thyroid glands (TG), and peripheral blood (PB) lymphocytes. Thyrocytes were prepared by collagenase digestion, and T or non-T cells were separated by E-rosette formation. Thyrocytes were cocultured in the presence or absence of interferon-gamma, and the expression of HLA-DR antigens on cultured thyrocytes was examined by an indirect immunofluorescence method using monoclonal anti-HLA-DR antibody and monoclonal anti-HLA-DQ antibody. The cellular interactions were assessed as the proliferative response of T cells to autologous stimulators, such as thyrocytes or lymphocytes. Expression of HLA-DR antigens on thyrocytes after culture for 18 h in the absence of interferon-gamma was found in two thirds of the patients with Graves' disease studied (n = 18). Interferon-gamma induced and maintained the expression of HLA-DR antigens on thyrocytes. The percentages of HLA-DR+T cells were significantly higher among TG-T cells than among PB-T cells [32.6 +/- 12.4% (+/- SD) vs. 12.2 +/-5.0%; n = 18; P less than 0.01]. Thyrocytes from Graves' patients induced proliferation of both autologous PB-T cells and TG-T cells, and TG-T cells stimulated proliferation of autologous PB-T cells. In conclusion, interferon-gamma induces HLA-DR antigen expression on thyrocytes from patients with Graves' disease, and these cells induce proliferation of autologous T cells, which may, in turn, act on thyrocytes to perpetuate the process.