Lower thyroid functional status within the euthyroid range may confer increased atherosclerosis susceptibility, as evidenced by increased intima media thickness and coronary artery calcification. Associations of lower thyroid functional status with pro-atherogenic (inflammatory) biomarkers may also extend into the euthyroid range. Here we established relationships of plasma tumor necrosis factor-alpha (TNF-alpha) with thyroid stimulating hormone (TSH) and free thyroxine (free T-4) in euthyroid subjects with and without Type 2 diabetes mellitus (T2DM). Fasting TSH, free T-4, and TNF-alpha were measured in 81 nondiabetic subjects and in 73 T2DM subjects with Type 2 diabetes mellitus (T2DM; insulin using subjects were excluded) with TSH and free T-4 levels each within the institutional reference ranges. TSH was similar and free T-4 was slightly higher in T2DM (p < 0.016). Plasma TNF-alpha was increased in T2DM (p = 0.007). In nondiabetic subjects, TNF-alpha was correlated inversely with free T-4 (r = -0.254, p = 0.022), whereas such a relationship was absent in T2DM subjects (r = 0.058, p = 0.63). Multivariable linear regression analysis showed that in nondiabetic subjects TNF-alpha remained inversely associated with free T-4 after adjustment for age and sex (beta = -0.243, p = 0.032) and additionally for thyroid autoantibodies (beta = -0.251, p = 0.027), contrasting the lack of relationship in T2DM subjects (interaction: p = 0.053). In T2DM subjects, TNF-alpha was also unrelated to free T-4 taking account of possible confounders, as well as after exclusion of subjects using metformin or antihypertensive medication. In conclusion, higher levels of TNF-alpha relate to lower free T-4. Low-normal thyroid function could influence pro-inflammatory pathways. This relationship appears to be disturbed in T2DM.