Increases in thyroid cell major histocompatibility complex (MHC) class I and class II expression have been suggested to be an important factor in the development or perpetuation of Graves' disease. It is hypothesized that elevations result in abnormal presentation of thyroid antigens to immune cells, and that iodide and/or methimazole (MMI) are effective therapeutic agents because, at least in part, of their suppression of MHC expression. In this report, we show that Graves' patients pretreated with iodide only 4 days before surgery have lower levels of MHC class I and class II RNA levels in their thyroid tissue than do patients with no iodide pretreatment (P < 0.001 and 0.03, respectively). Because patients in both groups are treated with MMI and because the change is independent of the amounts of MMI used to treat patients, the class I and class II changes cannot be ascribed to MMI. The iodide action to decrease MHC class I and class II RNA levels was duplicated using cultured human thyroid cells in vitro; the iodide effect was dependent on the iodide concentration, was not duplicated by chloride, was not associated with an alteration in cAMP levels or with a change in thyrotropin receptor RNA levels, and was evident in gamma-interferon-treated cells. The data suggest, therefore, that the therapeutic action of iodide in Graves' patients is associated with decreased MHC gene expression, that this action is a direct effect of high concentrations of iodide on the thyroid cells, and that altered MHC gene expression in the target tissue may well be associated with the development or perpetuation of Graves' disease.