Type I iodothyronine deiodinase is a approximately 50-kDa, integral membrane protein that catalyzes the outer ring deiodination of thyroxine. Despite the identification and cloning of a 27-kDa selenoprotein with the catalytic properties of the type I enzyme, the composition and the physical nature of the active deiodinase are unknown. In this report, we use a molecular approach to determine holoenzyme composition, the role of the membrane anchor on enzyme assembly, and the contribution of individual 27-kDa subunits to catalysis. Overexpression of an immunologically unique rat 27-kDa protein in LLC-PK1 cells that contain abundant catalytically active 27-kDa selenoprotein decreased deiodination by approximately 50%, and > 95% of the LLC-PK1 derived 27-kDa selenoprotein was specifically immune precipitated by the anti-rat enzyme antibody. The hybrid enzyme had a molecular mass of 54 kDa and an s(20,w) of approximately 3.5 S indicating that every native 27-kDa selenoprotein partnered with an inert rat 27-kDa subunit in a homodimer. Enzyme assembly did not depend on the presence of the N-terminal membrane anchor of the 27-kDa subunit. Direct visualization of the deiodinase dimer showed that the holoenzyme was sorted to the basolateral plasma membrane of the renal epithelial cell.