We have previously reported that over 85% of patients with Graves' disease have detectable serum antibodies against a human intracisternal type A retroviral particle (HIAP), which are not present in age- and gender-matched controls, suggesting a role for HIAP in triggering the autoimmune process leading to Graves' disease. To investigate the interaction of this viral particle with genetic factors, 35 members of 3 kindreds, selected because of a high family prevalence of Graves' disease (a total of 11 members affected), were examined for clinical signs of thyroid dysfunction, goiter, and opthalmopathy. Thyroid function tests and autoimmune serological profiles were also obtained. In addition, subjects were tested for the presence of antibodies against HIAP by means of immunoblot analysis of their sera, and their human leukocyte antigen (HLA) class II alleles were determined by DNA methodology. Molecular genetic analyses enabled the detection of postulated HLA susceptibility haplotypes in each family. These families had 8, 4, and 5 members, respectively, with such apparent susceptibility genes and 11, 5, and 9 members, respectively, with immunological evidence of retroviral exposure. In the presence of both factors (codetected in a total of 15 members of the 3 kindreds), the incidence of Graves' disease was 100%, 67%, and 80%, respectively. One additional member of family B and 3 in family C with both viral and genetic susceptibility factors were found to have serological abnormalities and/or goiter and ocular signs consistent with evolving or preclinical Graves' disease. In families A and C, tight linkage between HLA haplotypes and Graves' disease was demonstrated in a manner consistent with recessive inheritance. The association between the occurrence of both anti-HIAP-I antibody positivity and HLA susceptibility and the presence of Graves' disease was highly significant (P < 0.001). The pathogenesis of Graves' disease in these families appears to be attributable to the interaction between the immune response to an intracisternal type A retroviral particle and immunogenetic susceptibility, leading to the autoimmune processes that underlie Graves' disease, with subsequent development of the characteristic features of the illness. Data from these families suggest that both of these factors are necessary for final disease expression. These results imply that serological evidence of retroviral exposure together with genetic HLA susceptibility are the two major predisposing factors underlying the pathogenesis of Graves' disease. Further studies will establish whether prospective identification of persons at risk for Graves' disease is possible by this means.