This study was undertaken to determine the effects of interleukin-1 (IL-1) on human thyroid epithelial cells (thyrocytes) and whether thyrocytes produce IL-1. The supernatants of cultured peripheral blood monocytes stimulated with lipopolysaccharide (LPS) increased [3H]thymidine incorporation into thyrocytes from normal subjects and patients with Grave's disease. The IL-1 levels of cultured supernatants of monocytes were measured by a thymocyte costimulation assay and a solid phase sandwich immunoenzymometric assay. The supernatants of monocyte cultures stimulated with LPS contained significant amounts of IL-1 bioactivity and IL-1 alpha and IL-1 beta immunoactivity. Recombinant IL-1 beta (rIL-1 beta) also stimulated [3H]thymidine incorporation into thyrocytes from normal subjects and patients with Graves' disease, and it increased the proportion of thyrocytes in the S phase of the cell cycle. Furthermore, thyrocytes stimulated with rIL-1 beta for 24 h produced significant amounts of prostaglandin E2. Indomethacin inhibited completely the rIL-1 beta-stimulated prostaglandin E2 production and increased markedly [3H]thymidine incorporation. IL-1-like activity also was detected in the cultured supernatants of lipopolysaccharide (LPS)-stimulated thyrocytes from Graves' and normal thyroid glands, but the amount of IL-1-like activity secreted by thyrocytes was significantly less than that secreted by circulating monocytes. The kinetics of the release of IL-1-like activity by thyrocytes were similar to those of its production by circulating monocytes. Pretreatment of thyrocytes with interferon-gamma failed to enhance the release of IL-1-like activity. Moreover, IL-1 alpha or IL-1 beta immunoreactivity could not be detected in the supernatants of LPS-stimulated thyrocytes, despite the presence of IL-1-like bioactivity. No IL-1 alpha mRNA was detected in unstimulated thyrocytes or thyrocytes stimulated with LPS and phorbol myristate acid. These findings demonstrate that thyrocytes produce an IL-1-like substance(s), but not IL-1, when stimulated by LPS. We conclude that IL-1 may regulate the proliferation of thyrocytes and that local production of IL-1 by infiltrating monocytes may contribute to the development of goiter in patients with autoimmune thyroid diseases.