Previous work showed that treatment of rats with tumour necrosis factor-α produced a model of nonthyroid illness in which there was reduction of circulating thyroid hormones and TSH, reduced thyroid response to TSH, and reduced thyroid iodide uptake. In vitro studies showed that tumour necrosis factor-α binds to a specific receptor on FRTL-5 rat thyroid cells, that TSH increases the number of tumour necrosis factor-α receptors, and that tumour necrosis factor-α inhibits iodide uptake by these cells. In the present study, we obtained additional data on the effects of tumour necrosis factor-α on FRTL-5 cells and studied the mechanism of action of tumour necrosis factor-α in these cells. Tumour necrosis factor-α inhibited both basal and TSH-stimulated [125I]iodide uptake; tumour necrosis factor-α slowed the recovery of [125I]iodide trapping after the cells were exposed to TSH and augmented the loss of the [125I]iodide trapping function after the cells were deprived of TSH; tumour necrosis factor-α inhibited [125I]iodide trapping in a noncompetitive manner; tumour necrosis factor-α did not affect cell growth of FRTL-5 cells. Interleukin-1 (IL-1) also inhibited basal and TSH-stimulated [125I]iodide uptake, but it stimulated cell growth. Tumour necrosis factor-α and IL-1 did not affect the generation of cAMP in the presence or absence of TSH; these cytokines blocked the cAMP-induced stimulation of [125I]iodide uptake. Tumour necrosis factor-α did not affect [3H]arachidonic acid uptake or release by FRTL-5 cells. The inhibitors of the phospholipase A2-arachidonic acid pathway did not affect the action of tumour necrosis factor-α. The H2O2 scavenger, catalase, did not block the action of tumour necrosis factor-α. The results show that both tumour necrosis factor-α and IL-1 inhibit FRTL-5 function and that the site of action of these cytokines is distal to the production of cAMP. The actions of tumour necrosis factor-α on FRTL-5 cells do not appear to be mediated by the phospholipase A2-arachidonic acid pathway or by H2O2.