Type 3 iodothyronine deiodinase (D3) is a selenoenzyme that inactivates thyroid hormone. It is necessary for T₃ homeostasis in the central nervous system. D3 activity has been identified in many regions of the brain and parallels thyroid status, but the level at which it is regulated and its specific cellular locations are not known. We evaluated the effect of thyroid status on the expression of the D3 gene within the central nervous system using in situ hybridization histochemistry. D3 messenger RNA (mRNA) was identified throughout, but with high focal expression in the hippocampal pyramidal neurons, granule cells of the dentate nucleus, and layers II–VI of the cerebral cortex. In every region, D3 mRNA abundance was correlated with thyroid status. Four different D3 transcripts were identified by Northern analyses, with evidence for region-specific processing, and D3 mRNA increased 4- to 50-fold from the euthyroid to the hyperthyroid state. D3 mRNA was not detectable in hypothyroid brain. In the central nervous system, the D3 gene is highly T₃ responsive, and its focal localization within the hippocampus and cerebral cortex suggests an important role for T₃ homeostasis in memory and cognitive functions.