ALTHOUGHthyroxine (3,5,3',5'-tetraiodothyronine, T₄) is the principal secretory product of the vertebrate thyroid, its essential metabolic and developmental effects are all mediated by 3,5,3'-triiodothyronine (T₃), which is produced from the prohormone by 5'-deiodination. The type-I iodothyronine deiodinase, a thiol-requiring propylthiouracil-sensitive oxidoreductase, is found mainly in liver and kidney and provides most of the circulating T₃¹ but so far this enzyme has not been purified. Using expression cloning in the Xenopus oocyte, we have isolated a 2.1-kilobase complementary DNA for this deiodinase from a rat liver cDNA library. The kinetic properties of the protein expressed in transient assay systems, the tissue distribution of the messenger RNA, and its changes with thyroid status, all confirm its identity. We find that the mRNA for this enzyme contains a UGA codon for selenocysteine which is necessary for maximal enzyme activity. This explains why conversion of T₄ to T₃is impaired in experimental selenium deficiency^2–6 and identifies an essential role for this trace element in thyroid hormone action.