As is typical of other hormone systems, the actions of the thyroid hormones (TH) differ from tissue to tissue depending upon a number of variables. In addition to varying expression levels of TH receptors and transporters, differing patterns of TH metabolism provide a critical mechanism whereby TH action can be individualized in cells depending on the needs of the organism. The iodothyronine deiodinases constitute a family of selenoenzymes that selectively remove iodide from thyroxine and its derivatives, thus activating or inactivating these hormones. Three deiodinases have been identified, and much has been learned regarding the differing structures, catalytic activities, and expression patterns of these proteins. Because of their differing properties, the deiodinases appear to serve varying functions that are important in regulating metabolic processes, TH action during development, and feedback control of the thyroid axis. This review will briefly assess these functional roles and others proposed for the deiodinases and examine some of the current challenges in expanding our knowledge of these important components of the thyroid homeostatic system.