The protein encoded by this gene belongs to the iodothyronine deiodinase family. It catalyzes the conversion of prohormone thyroxine (3,5,3',5'-tetraiodothyronine, T4) to the bioactive thyroid hormone (3,5,3'-triiodothyronine, T3) by outer ring 5'-deiodination. This gene is widely expressed, including in thyroid, placenta, pituitary and brain. It is thought to be responsible for the 'local' production of T3, and thus important in influencing thyroid hormone action in these tissues. It has also been reported to be highly expressed in thyroids of patients with Graves disease, and in follicular adenomas. The intrathyroidal T4 to T3 conversion by this enzyme may contribute significantly to the relative increase in thyroidal T3 production in these patients. This protein is a selenoprotein containing the rare selenocysteine (Sec) amino acid at its active site, and may contain additional Sec residues. Sec is encoded by the UGA codon, which normally signals translation termination. The 3' UTRs of selenoprotein mRNAs contain a conserved stem-loop structure, designated the Sec insertion sequence (SECIS) element, that is necessary for the recognition of UGA as a Sec codon, rather than as a stop signal. Alternatively spliced transcript variants have been described for this gene. [provided by RefSeq, May 2016].