An investigation was made of the possible role of the hepatic microsomal membrane in the activation of 5'-iodothyronine deiodinase (5'-DI) by a cytosolic activating system consisting of fraction A (relative mass (Mr) greater than 60,000), fraction B (Mr, approximately 13,000), and NADPH. Activation of 5'-DI in washed microsomes was compared with that of a microsome extract prepared by solubilization with 3-[(3-cholamidopropyl)dimethylammonio]-1-propane sulphonate and further purification by fractional precipitation with polyethylene glycol and by DEAE-Sephacel chromatography. All 5'-DI preparations exhibited qualitatively similar dependence upon NADPH and cytosolic factors in fractions A and B for 5'-DI activation and were relatively unresponsive to NADH. Activation of solubilized preparations, unlike that of intact microsomes, was more readily inhibited by low concentrations of detergent and not inhibited by NADPH concentrations above 0.25 mM. Attempted purification of 5'-DI failed to produce a substantial increase in specific activity of the enzyme. It is concluded that, while glutathione-independent cytosolic factors and NADPH can activate 5'-DI in the absence of an intact microsomal membrane, some membrane constituents removed during solubilization and purification of the enzyme are required for maximal activation.