The protein encoded by this gene belongs to the iodothyronine deiodinase family. It activates thyroid hormone by converting the prohormone thyroxine (T4) by outer ring deiodination (ORD) to bioactive 3,3',5-triiodothyronine (T3). It also degrades both hormones by inner ring deiodination (IRD). This protein contains a selenocysteine (Sec) residue, which is necessary for maximal enzyme activity. The selenocysteine is encoded by the UGA codon, which normally signals translation termination. The 3' UTR of Sec-containing genes have a common stem-loop structure, the sec insertion sequence (SECIS), which is necessary for the recognition of UGA as a Sec codon rather than as a stop signal. Impaired expression of this gene results in hypothyroidism, which causes severe defects in the development of many different tissues. [provided by RefSeq, Jul 2008]