Subcellular preparations from rat liver, brain, and kidney and from human liver were tested for their ability to desulfate T3 sulfate (T3SO4). Activity was found associated with the microsomal fraction: rat liver was the most active, hydrolyzing 76 pmol/min.mg protein of T3SO4 while preparations from rat kidney and brain were about 1/5 and 1/20 as active. Microsomal preparations from human liver obtained at autopsy were as active as fresh rat preparations. Thyroxine sulfate was not an active substrate. Microsomes prepared with dithiothreitol and EDTA in order to detect deiodinating activity maintained T3SO4-desulfating activity. Cytosolic preparations containing arylsulfatase activities failed to desulfate T3SO4. Estrone sulfate, dehydroepiandrosterone sulfate, and nitrophenyl sulfate are known substrates for microsome-associated arylsulfatase activities, and these compounds were found to inhibit hydrolysis of T3SO4 to various extents. Of these competing sulfatase substrates, only dehydroepiandrosterone sulfate inhibits T3SO4 desulfation completely. In order to determine whether desulfation occurs in intact cells, isolated hepatocytes were incubated in the presence of 7 and 54 microM T3SO4. These cells were found to hydrolyze 1-1.5% of the sulfate ester/h for up to 3 h. The demonstration of this activity raises the possibility that these hepatic cells may be able to reactivate T3SO4, which has generally been regarded as an irreversibly inactivated metabolite.