Imaging in thyroid eye disease (TED) is used to exclude other diagnoses, assess for apical crowding and plan surgery. But to quantify TED activity objectively, subjective clinical scoring assessments remain the norm. Magnetic resonance imaging (MRI) T2-relaxation times correlate with extra-ocular muscle (EOM) inflammation, but are confounded by signal from fat. We investigated whether T2-relaxation mapping in combination with fat fraction (FF) measurements could quantify disease activity in EOMs objectively. Sixty-two TED patients and six controls were enroled for coronal short tau inversion recovery (STIR), T2 multi-echo fast-spin echo and multi-echo fast-gradient echo MRI of the orbits. STIR signal intensity ratios (SIRs), T2-relaxation times and percentage FF were derived for inferior, lateral, superior and medial recti bilaterally. Twelve patients were re-scanned following immunosuppressive treatment. The results found a positive correlation for all subjects between T2 and SIR (p < 0.001), but only mean T2 differed significantly between patients and controls (p < 0.001). We measured FF in EOMs for the first time and found it greater in TED (p < 0.001). There was also a significant reduction in mean T2 after treatment, with a corresponding reduction in the clinical activity score (CAS) in almost all patients. We show that T2-relaxation times differentiate between normal and inflamed EOMs and are responsive to treatment. Combined, uniquely, with FF measurement in EOMs, an objective, quantitative marker of inflammation in TED-affected muscles could be derived. T2-relaxation times mirrored improvements in CAS after treatment, occasionally preceding them. Rarely, they diverged, suggesting limitations in the CAS as a disease burden marker.