Background: Vitamin D deficiency has been proposed to have a role in the development and course of Graves' disease (GD). Muscle weakness and quality of life (QoL) impairments are shared features of GD and vitamin D deficiency. We aimed at investigating whether vitamin D supplementation would improve restoration of muscle performance and thyroid-related QoL in GD and at describing the effect of anti-thyroid medication (ATD) on these outcomes. Methods: In a double-blinded clinical trial, hyperthyroid patients with a first-time diagnosis of GD were randomized to vitamin D 70 μg (2800 IU)/day or matching placebo as add-on to standard ATD. At baseline and after 3 and 9 months of intervention, we assessed isometric muscle strength, muscle function tests, postural stability, body composition, and QoL-impairment by using the ThyPRO questionnaire. Linear mixed modeling was used to analyze between-group differences. (The DAGMAR study clinicaltrials.gov ID NCT02384668). Results: Nine months of vitamin D supplementation caused an attenuation of muscle strength increment in all muscle measures investigated, significant at knee extension 60° where the increase was 24% lower (p = 0.04) in the vitamin D group compared with placebo. Compared with placebo, vitamin D supplementation tended to reduce gain of lean body mass (-24%, p = 0.08). Vitamin D supplementation significantly impeded alleviation of Composite QoL and the same trend was observed for the Overall QoL-Impact and Impaired Daily Life scales. In response to ATD, all measures improved significantly. The increase in muscle strength ranged from 25% to 40% (pall < 0.001), and increment of lean body mass was 10% (p < 0.001). Large changes were observed in all QoL scales. Conclusions: Nine months of vitamin D supplementation caused unfavorable effects on restoration of muscle performance. In contrast, ATD treatment was associated with marked improvement in all measures of muscle performance and thyroid-related QoL. In patients with newly diagnosed GD, high-dose vitamin D supplementation should not be recommended to improve muscle function, but ATD is of major importance to alleviate muscle impairment.