Dio3 belongs to the iodothyronine deiodinase family. It has an essential role for regulation of thyroid hormone inactivation during embryological development in that it catalyzes the inactivation of thyroid hormone by inner ring deiodination of the prohormone thyroxine (T4) and the bioactive hormone 3,3',5-triiodothyronine (T3) to inactive metabolites, 3,3',5'-triiodothyronine (RT3) and 3,3'-diiodothyronine (T2), respectively. Dio3 may play a role in preventing premature exposure of developing fetal tissues to adult levels of thyroid hormones and has been linked to the development of consumptive hypothyroidism in both infants and adults.