Cells are not passive bystanders in the process of hormonal signaling and instead can actively customize hormonal action. While diffusing from the plasma membrane to the nucleus, thyroid hormone is modified via the action of thioredoxin fold-containing selenoenzymes known as deiodinases. Whereas the type II deiodinase (D2) converts the prohormone thyroxine (T4) to the biologically active T3, the type III deiodinase (D3) converts it to reverse T3, an inactive metabolite. D3 also inactivates T3 to T2, terminating thyroid hormone action. Therefore, D2 provides cells with the ability to produce extra amounts of T3 and thus enhances thyroid hormone signaling. In contrast, expression of D3 results in the opposite action. In addition, the D2 protein is unique in that it can be switched off and on via an ubiquitin-regulated mechanism, triggered by catalysis of T4. Induction of D2 enhances local thyroid hormone signaling and energy expenditure during activation of brown adipose tissue by cold exposure or high fat diet. On the other hand, induction of D3 in myocardium and brain during ischemia and hypoxia decreases energy expenditure as part of a homeostatic mechanism to slow down cell metabolism in the face of limited O2 supply.