Deiodination is required for conversion of thyroxine, the inactive prohormone secreted by the thyroid gland, to 3,5,3'-triiodothyronine, the biologically active thyroid hormone. The principal enzyme catalyzing this reaction, Type I iodothyronine 5' deiodinase, was shown recently to contain the amino acid, selenocysteine, and site-directed mutagenesis showed that this amino acid confers the biochemical properties characteristic of this enzyme. Previous studies suggest that a histidine residue may also be critical for activity. To further our understanding of the biochemical mechanism of this reaction, we have used in vitro mutagenesis to examine the contribution of each of the 4 histidines in this enzyme to the deiodination process. Two of the histidines (185 and 253) are not involved in deiodination, as their removal had no effect on activity. Mutagenesis of histidine 158 resulted in complete loss of activity, suggesting a role in either protein conformation or catalysis. The most informative results were obtained from the studies of histidine 174. Mutagenesis of this histidine to asparagine or glutamine altered reactivity with substrate and reduced inhibition by diethylpyrocarbonate and rose bengal. These results demonstrate that histidine 174 is critical to function and appears to be involved in binding of hormone.