Deiodination is the foremost pathway of thyroid hormone metabolism not only in quantitative terms but also because thyroxine (T4) is activated by outer ring deiodination (ORD) to 3,3′,5-triiodothyronine (T 3), whereas both T4 and T3 are inactivated by inner ring deiodination (IRD) to 3,3′,5-triiodothyronine and 3,3′-diiodothyronine, respectively. These reactions are catalyzed by three iodothyronine deiodinases, D1-3. Although they are homologous selenoproteins, they differ in important respects such as catalysis of ORD and/or IRD, deiodination of sulfated iodothyronines, inhibition by the thyrostatic drug propylthiouracil, and regulation during fetal and neonatal development, by thyroid state, and during illness. In this review we will briefly discuss recent developments in these different areas. These have resulted in the emerging view that the biological activity of thyroid hormone is regulated locally by tissue-specific regulation of the different deiodinases.