We have developed and characterized a prototype of a TSH receptor antagonist derived from the hCG molecule. This may be used to block human TSH receptor both functionally and immunologically, particularly in the study of Graves' disease. Our hCG derived TSH receptor blocker compares favorably with other substances (e.g. deglycosylated forms of TSH, synthetic peptides of the alpha or beta subunit of TSH) that hare been reported to inhibit bTSH binding or bTSH-stimulated cAMP response (Joshi et al., 1981; Morris et al., 1988). It has a much higher affinity for human TSH receptor than the TSH subunit peptides and it is the only substance an efficacy of which has been proven in vivo so far. Recent progress in the synthesis of recombinant glycoprotein hormones should permit to biosynthetically produce this or a similar TSH receptor antagonist. With respect to Graves' disease, the data suggest that TSH receptor, in addition to its role in maintaining thyroid hyperfunction, plays also a role in propagating the thyroid autoimmune disease itself. Stimulation of TSH receptor by bTSH as well as TSAb enhances the expression of HLA class II antigens on the surface of thyrocytes, and a blockade of TSH receptor results in a substantial inhibition of this immunological key event. This could possibly explain why suppression of TSH by administering levothyroxine was found in a recent study by Hashizume and coworkers (1991) to decrease TSAb titers and to reduce relapse rate in patients with Graves' hyperthyroidism.(ABSTRACT TRUNCATED AT 250 WORDS)