We prepared artificial vesicles that are lysed upon cell-mediated immunological attack by human lymphocytes. These vesicles are made from a mixture of dimyristoyl lecithin, dipalmitoyl lecithin, and cholesterol, have eye muscle membrane protein (EMP) inserted into the bilayer wall, and contain intravesicular (99m)Tc marker. Injury to the vesicular membrane was assessed by measurement of (99m)Tc release. Thyroglobulin (Tg) and Tg-anti-Tg complex (TgA) bind to EMP-vesicles to an extent equal to or greater than to native eye muscle membranes in vitro; this binding requires the presence of normal human IgG. The role of Tg, TgA, IgG, and peripheral blood lymphocytes in altering membrane permeability was analyzed. Incubation of vesicles for up to 3 hr alone, with added IgG alone, or with further addition of Tg or TgA did not result in (99m)Tc release. Addition of lymphocytes from normal donors to the above four preparations showed release in the presence of TgA. Lymphocytes from each of eight patients with Graves ophthalmopathy caused release not only in the presence of TgA, but also in the presence of Tg. Separation of a patient's lymphocytes into high- and low-affinity rosette-formers (T and K cells, respectively) showed that cell-mediated vesicle lysis in the presence of TgA was greater with K cells than with T cells, while vesicle lysis in the presence of Tg was greater with T cells than with K cells. Vesicles made with inserted Tg but lacking EMP were not lysed by such T cells. Lymphocytes failed to induce permeability changes in vesicles containing other inserted proteins obtained from human nonextraocular muscle, liver, spleen, or adrenal, even if Tg or TgA were present. The results support the concept that muscle cell damage in Graves ophthalmopathy is immunological, cell-mediated, and of two types: (i) K lymphocytes reacting to immune complex, TgA, on the eye muscle cell surface (i.e., antibody-dependent cytotoxicity) and (ii) sensitized T lymphocytes reacting to Tg on the eye muscle cell surface. An antigenic role for EMP is possible, but has not been unequivocally proven.