Graves' disease (GD) is a common autoimmune condition. At its core, stimulatory autoantibodies are directed at the thyroid-stimulating hormone receptor (TSHR), resulting in dysregulated thyroid gland activity and growth. Closely associated with GD is the ocular condition known as thyroid-associated ophthalmopathy (TAO). The pathogenesis of TAO remains enigmatic as do the connections between the thyroid and orbit. This review highlights the putative molecular mechanisms involved in TAO and suggests how these insights provide future directions for identifying therapeutic targets. Genetic, epigenetic, and environmental factors have been suggested as contributory to the development of GD and TAO. Thyroid-stimulating hormone receptor and insulin-like growth factor receptor (IGF-1R) are expressed at higher levels in the orbital connective tissue from individuals with TAO than in healthy tissues. Together, they form a functional complex and appear to promote signaling relevant to GD and TAO. Orbital fibroblasts display an array of cell surface receptors and generate a host of inflammatory molecules that may participate in T and B cell infiltration. Recently, a population of orbital fibroblasts has been putatively traced to bone marrow-derived progenitor cells, known as fibrocytes, as they express CD45, CD34, CXCR4, collagen I, functional TSHR, and thyroglobulin (Tg). Fibrocytes become more numerous in GD and we believe traffic to the orbit in TAO. Numerous attempts at developing complete animal models of GD have been largely unsuccessful, because they lack fidelity with the ocular manifestations seen in TAO. Better understanding of the pathogenesis of TAO and development of improved animal models should greatly accelerate the identification of medical therapy for this vexing medical problem.