Although goiter formation and hypothyroidism are not infrequent following lithium therapy, the association of exophthalmos and/or elevated thyroxine levels with lithium is uncommon. We describe a 62 year old man who rapidly developed exophthalmos, elevated circulating thyroxine, elevated TSH levels and elevated radioiodine uptake within six weeks of reexposure to lithium carbonate. When the medication was stopped, all indices of thyroid function returned to normal and the proptosis receded from 22 to 17mm. Lithium decreases secretion of preformed thyroid hormone and the secondary elevation of TSH levels usually restores euthyroid status. We propose that in our patient, because triiodothyronine levels remained normal, the pituitary was refractory to the normal inhibitory feedback effect of thyroxine and that continued hypersecretion of TSH resulted in hyperthyroidism