Serum samples taken from four patients who had low serum T4 concentrations (less than 2 micrograms/dl) during severe non-thyroidal illness were found to contain a heat-stable, dialyzable inhibitor of 125I T4 binding to plasma proteins. Inhibitory activity coincided with high dose furosemide treatment for oliguric renal failure. Inhibition was proportional to the serum furosemide concentration and the effect was reproduced in vitro by addition of furosemide to normal serum. The inhibitory effect diminished with serum dilution while maintaining the same relative concentration of furosemide. A time-course study in one patient demonstrated a close temporal relationship between high serum concentrations of furosemide and subnormal T4, associated with T3 resin uptake values compatible with increased occupancy of T4-binding globulin by a competitor. These findings demonstrate that furosemide in high concentrations can inhibit T4 binding in plasma and may be a factor contributing to the development of the low T4 state in critical illness.