Iodothyronine deiodinases catalyze the conversion of the thyroid prohormone T₄ to T₃ by outer ring deiodination (ORD) of the iodothyronine molecule. The catalytic cycle of deiodinases is considered to be critically dependent on a reducing thiol cosubstrate that regenerates the selenoenzyme to its native state. The endogenous cosubstrate has still not been firmly identified; in studies in vitro the sulfhydryl reagent dithiothreitol (DTT) is commonly employed to activate ORD. We now have characterized an ORD activity in the teleost gilthead seabream (Sparus auratus) that is inhibited by DTT. DTT inhibited rT₃ ORD by 70 and 100% in kidney homogenates (IC₅₀ 0.4 mmol/liter) and microsomes (IC₅₀ 0.1 mmol/liter), respectively. The omission of DTT from the incubation medium restored renal ORD Michaelis-Menten kinetics with a K_m-value of 5 µmol/liter rT₃, and unmasked the inhibition by 6-n-propyl-2-thiouracil (PTU). A putative seabream deiodinase type 1 (saD1), derived from kidney mRNA, showed high homology ( 41% amino acid identity) with vertebrate D1s. Features of this putative saD1 include a selenocysteine encoded by an in-frame UGA codon, consensus sequences and a predicted secondary structure for a selenocysteine insertion sequence, and an amino acid composition of the catalytic center that is identical to reported consensus sequences for D1. Remarkably, three out of six cysteines that are present in the deduced saD1 protein occur in the predicted amino terminal hydrophobic region. We suggest that the effects of DTT on rT₃ ORD can be explained by interactions with the cysteines' unique to the putative saD1 protein.