I. C. (Mike) O'Grady, 55, a retired official of the Western Union Telegraph Company who was active in youth and church groups, died of kidney failure Monday at Fairfax Hospital. He lived in Falls Church.

Mr. O'Grady was born in Kansas City, Mo. He joined Western Union there in 1939 as a messenger. After World War II service in the Navy in the Pacific, he returned to the company. He specialized in computers and over the years worked in various locations in the Southwest and New York City.

In 1966, he was transferred to the Washington area and was assistant director of computer programming at the time of his retirement in 1972 for reasons of health.

Mr. O'Grady was active in Boy Scout and Girl Scout work at St. James Catholic Church in Falls Church. He also was a member of the Edward Douglass White Council of the Knights of Columbus.

Survivors include his wife, Norma J., of Falls Church; one son, Michael, also of Falls Church; five daughters, Timotha Dawn O'Grady and Terry O'Grady, both of Falls Church, and Cheryl M. O'Grady, Karen S. Brown and Patricia Werr, all of Arlington; one brother, Robert T., of Needham, Mass., and one sister, Mary V. Ireland of Camp Springs, Pa.

The family suggests that expressions of sympathy be in the form of contributions to the St. James School Music Parents, Falls Church, Va., or to a charity of one's choice.