Graves' ophthalmopathy (GO) is an autoimmune orbital disorder most commonly associated with Graves' disease. Recent studies have underscored the role that orbital cells, particularly fibroblasts and adipocytes, play in causing the increase in orbital content responsible for clinical manifestations of the disease. GO seems to be related to autoimmune reactions triggered by autoreactive T lymphocytes of thyroid origin, which recognize antigen(s) shared by thyroid and orbit. The nature of the antigen (or antigens) involved is not fully understood, but TSH receptor is likely to be involved. Cytokines secreted by T lymphocytes, macrophages and fibroblasts play an essential role in perpetuating the disease. Animal models of GO have been developed, but results have not clarified GO pathogenesis yet. Progress in the management of the ophthalmopathy has been very limited, and glucocorticoids, orbital radiotherapy and orbital decompression remain the mainstays in GO treatment. Novel treatments, such as somatostatin analogues, antioxidants, cytokine antagonists are currently under investigation, as well as the effects of total thyroid ablation. Cessation of smoking currently represents the only form of GO (secondary and tertiary) prevention.