To elucidate tetraiodothyronine (T4) metabolism in developing rat retina 5-monodeiodinating and 5'-monodeiodinating activities were studied. T4 was incubated with aliquots of homogenate or crude primary subcellular fractions, and the 3,3',5'-triiodothyronine (rT3) or 3,5,3'-triiodothyronine (T3) produced were measured by radioimmunoassay. Reaction rates were dependent on incubation time, tissue amount, temperature and pH. The optimum pH values were 7.8 and 7.2 respectively for rT3-forming and T3-forming systems. Conversion of T4 to either T3 or rT3 was dependent on dithiothreitol concentration, and the T4-5'-deiodinating activity was inhibited by propylthiouracil. Deiodinase activities were mainly found in the crude microsomes. The retinal 5'-monodeiodination rate of T4 was immeasurably low by the 2nd day and the highest values were reached on 15th day of postnatal development. On the other hand deiodination of the T4 tyrosyl ring shows a progressive decline from birth, and adult values were reached on the 15th day. Data support the hypothesis that, in developing rat thyroxine, phenolic and tyrosyl-ring deiodinase activities are present in the retina and their reciprocal changes may regulate morphological and biochemical cell maturation.