We report a patient with Graves' disease in whom thyroid function was changed from initial hyperthyroidism to transient hypothyroidism and back to hyperthyroidism during interferon (IFN) therapy. A 43-year-old man was admitted to our hospital to receive IFN treatment for chronic active hepatitis (type C) in June 1998. His thyroid function was normal and testing for thyroid gland antibodies (TSH binding inhibitor immunoglobulins; TBII, anti-thyroglobulin antibodies; TgAb and anti-thyroid peroxidase antibodies; TPOAb) was negative before IFN therapy. The patient had neither history of thyroid disease nor any particular family history. He developed hyperthyroidism four months after its initiation of IFN therapy. When he was hyperthyroid, TBII, the activity of thyroid-stimulating antibodies (TSAb) and thyroid stimulation-blocking antibodies (TSBAb) were 40.2% (normal range, –15 ~ +15.0%), 1201% (normal range, ≤180%) and 52.0% (normal range, ≤45.6%), respectively. Thyroid ^99mTc(technetium)-uptake ratio (Tc-UTR) was 1.07% (normal range, 0.5–3.0%). He transiently developed hypothyroidism in December 1998 and recurrent hyperthyroidism in February 1999. When he was hypothyroid, TBII, TSAb and TSBAb were 74.3%, 769% and 95.9%, respectively. To investigate the mechanism of his fluctuating thyroid status, we serially assessed the serum levels of cytokines (TNF-α, IFN-γ, IL-1β, IL-2, IL-4) and the soluble form of ICAM-1 (sICAM-1) as well as the activities of two types of TSH receptor antibodies (TRAb), TSAb and TSBAb, before and after IFN therapy. There were no characteristic changes of cytokines or sICAM-1 during the follow-up period. The transient hypothyroid state may be explained by two possible mechanisms: one may be due to the shift in the balance between the stimulating and blocking types of TRAb, and the other may be due to the complication of destructive thyroiditis that developed during IFN therapy.