The iodothyronine deiodinases initiate or terminate thyroid hormone action and therefore are critical for the biological effects mediated by thyroid hormone. Over the years, research has focused on their role in preserving serum levels of the biologically active molecule T(3) during iodine deficiency. More recently, a fascinating new role of these enzymes has been unveiled. The activating deiodinase (D2) and the inactivating deiodinase (D3) can locally increase or decrease thyroid hormone signaling in a tissue- and temporal-specific fashion, independent of changes in thyroid hormone serum concentrations. This mechanism is particularly relevant because deiodinase expression can be modulated by a wide variety of endogenous signaling molecules such as sonic hedgehog, nuclear factor-kappaB, growth factors, bile acids, hypoxia-inducible factor-1alpha, as well as a growing number of xenobiotic substances. In light of these findings, it seems clear that deiodinases play a much broader role than once thought, with great ramifications for the control of thyroid hormone signaling during vertebrate development and metamorphosis, as well as injury response, tissue repair, hypothalamic function, and energy homeostasis in adults.