In most patients with Graves' hyperthyroidism the eye signs are self-limiting and mostly subclinical. However, about one-third of the patients have clinically relevant ophthalmopathy, which can be disabling and disfiguring. The mechanical causes of the symptoms and signs of the eye disease are largely understood, but the best way to manage the ophthalmopathy is still a matter of much debate. Adequate treatment of hyperthyroidism can aleviate the eye symptoms to some extent, but it is less clear which kind of antithyroid treatment is to be preferred in patients with ophthalmopathy. There is particular controversy about the possibly deleterious effect of radioiodine therapy on the ophthalmopathy; in view of the present evidence it seems prudent to refrain from using 131I and to prefer antithyroid drugs in patients with clinical ophthalmopathy. Further medical management can include immunosuppressive treatment (such as corticosteroids) that results in improvement in roughly two-thirds of the patients. Orbital irradiation appears to be the first choice for treatment in moderately severe ophthalmopathy because it is equally effective and much better tolerated than classical corticosteroid treatment. However, to really improve the efficacy of such interventions we should be able to select those patients that are likely to respond to immunomodulatory therapy. Disease activity is probably the prime determinant of response and it is a challenge for the future to develop reliable parameters of disease activity on the basis of which patients can be selected for further medical treatment, or can be subjected to rehabilitative surgery without prior immunosuppression.