The lymphoid tyrosine phosphatase (LYP), encoded by the protein tyrosine phosphatase-22 (PTPN22) gene, is a powerful inhibitor of T cell activation. Recently, a single nucleotide polymorphism (SNP), encoding a functional arginine to tryptophan residue change at LYP codon 620 has been shown to be associated with type 1 diabetes and other autoimmune disorders. We have used a PCR-restriction fragment (XcmI) assay to examine genotypes at the codon 620 polymorphism in 549 unrelated probands with Graves’ disease, 104 unrelated subjects with autoimmune Addison’s disease and 429 controls. The T nucleotide at the SNP, encoding the tryptophan 620 residue, was present in 151 of 1098 (13.8%) Graves’ disease alleles compared to 67 of 858 (7.8%) control alleles (χ² = 17.2, p = 3.4 × 10⁻⁵’ odds ratio = 1.88, 5–95% confidence intervals [CI] 1.39 to 2.55). Similarly, the T nucleotide at the codon 620 SNP was present in 26 of 208 (12.5%) Addison’s disease alleles vs 7.8% of controls (χ² = 4.63, p = 0.031; odds ratio = 1.69, 5–95% CI 1.04 to 2.73). These data suggest that this LYP polymorphism is a susceptibility allele for Graves’ disease with a major effect, and which is likely to have a role in many other autoimmune conditions.