T₄, the main product of thyroid secretion, is a critical signal in plasma that mediates the TSH-negative feedback mechanism. As a prohormone, T₄ must be converted to T₃ to acquire biological activity; thus, type 2 iodothyronine deiodinase (D2) is expected to play a critical role in this feedback mechanism. However, the mechanistic details of this pathway are still missing because, counterintuitively, D2 activity is rapidly lost in the presence of T₄ by a ubiquitin-proteasomal mechanism. In the present study, we demonstrate that D2 and TSH are coexpressed in rat pituitary thyrotrophs and that hypothyroidism increases D2 expression in these cells. Studies using two murine-derived thyrotroph cells, TtT-97 and TαT1, demonstrate high expression of D2 in thyrotrophs and confirm its sensitivity to negative regulation by T₄-induced proteasomal degradation of this enzyme. Despite this, expression of the Dio2 gene in TαT1 cells is higher than their T₄-induced D2 ubiquitinating capacity. As a result, D2 activity and net T₃ production in these cells are sustained, even at free T₄ concentrations that are severalfold above the physiological range. In this system, free T₄ concentrations and net D2-mediated T₃ production correlated negatively with TSHβ gene expression. These results resolve the apparent paradox between the homeostatic regulation of D2 and its role in mediating the critical mechanism by which T₄ triggers the TSH-negative feedback.