H uman and rat placental homogenates convert L-thyroxine (T4) to 3,5,3'-L-triiodothyronine (T3) via a pathway termed type II iodothyronine deiodination. To study regulation of this pathway, cell dispersions were prepared from human placental chorionic-decidual membrane. Dispersed cells deiodinated T4 and 3,3',5'-triiodothyronine (rT3), but not T3, at the 5' position. The reaction was only slightly inhibited by 1 mM 6-n-propylthiouracil, enhanced by dithiothreitol, and substantially inhibited by 50 nM iopanoic acid. Incubation of the cells in thyroid hormone-depleted medium induced a near doubling of T4 5'-deiodination in 36-48 h, with a significant rise seen as early as 12 h. Addition of T4, rT3, or T3 to hormone-depleted medium impaired the rise in type II deiodination in a dose-dependent fashion. T4 and rT3 were equipotent in this regard, and T3 was 2-3 times less potent. T4 was effective in physiological concentrations, 6.5-13 nM in medium containing 10% calf serum, and the effect of T4 was not due to its conversion to either T3 or rT3. In cells with deiodinase activity raised by 48 h incubation in thyroid hormone-depleted medium, addition of T4, T3, or rT3 reversed the increase in 8-24 h. Secretion of prolactin and beta hCG by the dispersed cells was not substantially affected by thyroid hormone deprivation. The increase in type II deiodination during thyroid hormone deprivation appears to depend on a signal from the thyroxine molecule, per se, and could potentially defend intracellular, and/or circulating, T3 pools in pathological states of mild-to-moderate hypothyroxinemia.