T ype 2 iodothyronine deiodinase (D2) is a recently cloned selenodeiodinase thought to provide intracellular 3,5,3' triiodothyronine (T3) to a restricted group of tissues. We report here the presence of D2 mRNA in human thyroid at levels 50-150-fold higher than in placenta. Surprisingly, while type 1 deiodinase (D1) is known to be present in human thyroid, D2 has not been evaluated previously. D2 mRNA was especially high in thyroids from Graves' patients and in follicular adenomas. Stimulated thyroids had higher D2 to D1 mRNA ratios than normal or multinodular glands suggesting differential regulation of D1 and D2 expression. Microsomes from normal, Graves', and TSH-stimulated thyroids contained low Km D2 activity resistant to propylthiouracil (1 mM) or to inactivation by N-bromoacetyl T3, agents which block or inactivate D1. At 2 nM thyroxine (T4), 100 times the physiological-free T4 levels, 60-80% of T4 to T3 conversion in stimulated, but only 27% of that in normal thyroids, is catalyzed by D2. We conclude that intrathyroidal T4 to T3 conversion by D2 may contribute significantly to the relative increase in thyroidal T3 production in patients with Graves' disease, toxic adenomas, and, perhaps, iodine deficiency.