Thyroid hormone serves many functions throughout brain development, but the mechanisms that control the timing of its actions in specific brain regions are poorly understood. In the cerebellum, thyroid hormone controls formation of the transient external germinal layer, which contains proliferative granule cell precursors, subsequent granule cell migration, and cerebellar foliation. We report that the thyroid hormone-inactivating type 3 deiodinase (encoded by Dio3) is expressed in the mouse cerebellum at embryonic and neonatal stages, suggesting a need to protect cerebellar tissues from premature stimulation by thyroid hormone. Dio3(-/-) mice displayed reduced foliation, accelerated disappearance of the external germinal layer, and premature expansion of the molecular layer at juvenile ages. Furthermore, Dio3(-/-) mice exhibited locomotor behavioral abnormalities and impaired ability in descending a vertical pole. To ascertain that these phenotypes resulted from inappropriate exposure to thyroid hormone, thyroid hormone receptor α1 (TRα1) was removed from Dio3(-/-) mice, which substantially corrected the cerebellar and behavioral phenotypes. Deletion of TRα1 did not correct the previously reported small thyroid gland or deafness in Dio3(-/-) mice, indicating that Dio3 controls the activation of specific receptor isoforms in different tissues. These findings suggest that type 3 deiodinase constrains the timing of thyroid hormone action during cerebellar development.