A case of a very rare association of toxic adenoma and papillary carcinoma with Graves' disease is presented. A 34-year-old woman developed Graves' disease with mild ophthalmopathy. An ultrasound revealed diffuse thyroid enlargement with a hypoechoic pattern and a hypoechoic nodule with regular edges of 1.6 cm in diameter at the lower pole of the left lobe. A thyroid 131I scintiscan showed a diffuse and homogeneous 131I distribution. The 131I uptake (RAIU) was elevated. One year later, while still on a low dose of methimazole, the patient had a recurrence of hyperthyroidism following an iodine load from a contrast agent. A further thyroid ultrasound confirmed the previously described pattern but showed a new hypoechoic nodule of 1.1 cm with irregular edges in the left lobe. A thyroid 131I scintiscan this time demonstrated a hyperactive area localised in the larger nodule and a lower diffuse uptake of the remaining tissue. Because of the worsening of the symptoms of hyperthyroidism, the patient had a left lobectomy. On histological examination, the larger nodule was well encapsulated and showed the characteristics of a hyperfunctioning follicular adenoma. The smaller nodule was a typically unencapsulated papillary carcinoma. Several other microfoci of papillary carcinoma were also found in the adjacent tissue. Completion of thyroidectomy was therefore performed, followed by 131I ablative therapy and thyroxine suppressive treatment. This observation suggests that the chronic abnormal stimulation of the thyroid gland by the thyroid-stimulating antibody (TSAb) may facilitate the neoplastic transformation of the thyrocytes in individuals with a critical genetic background.