Orbital changes in thyroid orbitopathy (TO) result from de novo adipogenesis, hyaluronan synthesis, interstitial oedema and enlargement of extraocular muscles. Cellular immunity, with predominantly CD4+ T cells expressing Th1 cytokines, and overexpression of macrophage-derived cytokines, perpetuate orbital inflammation. Orbital fibroblasts appear to be the major effector cells. Orbital fibroblasts express both thyrotropin receptor (TSHR) and insulin-like growth factor-1 receptor (IGF-1R) at higher levels than normal fibroblasts. TSHR expression increases in adipogenesis; TSHR agonism enhances hyaluronan production. IGF-1R stimulation leads to adipogenesis, hyaluronan synthesis and production of the chemokines, interleukin (IL)-16 and Regulated on Activation, Normal T Cell Expression and Secreted, which facilitate lymphocyte trafficking into the orbit. Immune activation uses a specific CD40:CD154 molecular bridge to activate orbital fibroblasts, which secrete pro-inflammatory cytokines including IL-1beta, IL-1alpha, IL-6, IL-8, macrophage chemoattractant protein-1 and transforming growth factor-beta, to perpetuate orbital inflammation. Molecular pathways including adenylyl cyclase/cyclic adenosine monophosphate, phophoinositide 3 kinase/AKT/mammalian target of rapamycin, mitogen-activated protein kinase are involved in TO. The emergence of a TO animal model and a new generation of TSHR antibody assays increasingly point towards TSHR as the primary autoantigen for extrathyroidal orbital involvement. Oxidative stress in TO resulting from imbalances of the oxidation-reduction state provides a framework of understanding for smoking prevention, achieving euthyroidism and the use of antioxidants such as selenium. Progress has been made in the understanding of the pathogenesis of TO, which should advance development of novel therapies targeting cellular immunity, specifically the CD40:CD40 ligand interaction, antibody-producing B cells, cytokines, TSHR and IGF-1R and its signalling pathways. Further studies in signalling networks and molecular triggers leading to burnout of TO will further our understanding of TO.