Thyroid hormone plays an essential role in mammalian brain maturation and function, in large part by regulating the expression of specific neuronal genes. In this tissue, the type 2 deiodinase (D2) appears to be essential for providing adequate levels of the active thyroid hormone 3,5,3-triiodothyronine (T3) during the developmental period. We have studied the regional and cellular localization of D2 mRNA in the brain of 15-day-old neonatal rats. D2 is expressed in the cerebral cortex, olfactory bulb, hippocampus, caudate, thalamus, hypothalamus, and cerebellum and was absent from the white matter. At the cellular level, D2 is expressed predominantly, if not exclusively, in astrocytes and in the tanycytes lining the third ventricle and present in the median eminence. These results suggest a close metabolic coupling between subsets of glial cells and neurons, whereby thyroxine is taken up from the blood and͞or cerebrospinal f luid by astrocytes and tanycytes, is deiodinated to T3, and then is released for utilization by neurons.Thyroid hormone controls a number of metabolic and developmental processes and, in particular, is an essential factor for normal mammalian brain maturation (1). In humans and other species, thyroid deficiency during the perinatal period results in irreversible brain damage and mental retardation (1, 2). The effects of thyroid hormone result primarily from changes in gene expression mediated through the binding of the active compound 3,5,3Ј-triiodothyronine (T3) to specific nuclear receptors of the steroid-retinoic acid-thyroid hormone superfamily. Previous studies have demonstrated that T3 nuclear receptors are expressed in a complex temporal pattern in specific regions of the brain that include the cerebral cortex, hippocampus, striatum, cerebellum, and hypothalamus (3, 4). These receptors are found predominantly in neurons and oligodendrocytes (5-7), and a number of neuronal genes have been shown to be regulated by thyroid hormone during development (8, 9).The majority of T3 in the brain is produced locally within the central nervous system by the 5Ј-deiodination of thyroxine (T4) (10). The type 2 deiodinase (D2) appears to be of particular importance in catalyzing the conversion of T4 to T3 in the brain during fetal and early neonatal life (11)(12)(13). During this period in the rat, the expression of D2 activity in brain increases at the end of gestation and is highest at 15-20 days of postnatal life (14). This pattern of activity corresponds temporally to the period when the developing brain is most dependent on thyroid hormone and correlates with increasing brain T3 concentrations, which peak at 2 weeks of age (13).An important property of the D2 is that its activity is markedly increased by thyroid hormone deficiency (15). This enhanced D2 activity serves to maintain T3 production in the brain in the face of limiting amounts of the prohormone T4 (16). Brain T3 levels thus appear to be protected to a considerable extent by alterations in circulating thyroid hormone levels (12...