The cultured rat hepatoma cell (R117--21B) homogenates metabolized 3,[3',5'-125I]triiodothyronine by phenolic ring deiodination and produced radioactive iodide and 3,3'-diiodothyronine. Thyroxine (T4) was converted to 3,3',5-triiodothyronine (T3). The production of 125I- represented the deiodination was observed to be pH 6.0--7.0. This enzyme reaction was accelerated by dithiothreitoil. Propylthiouracil strongly inhibited the phenolic ring deiodination at 0.1 mM, whereas an effect of 20 mM methylmercaptoimidazol on the deiodination was very weak or absent. Excess unlabeled iodothyronines (T4, T3 and 3,5-diiodo-L-thyronine) inhibited the phenolic ring deiodination of labeled 3,3',5'-triiodothyronine, although their inhibitory effect was slightly different. Triiodothyroacetic acid was a better inhibitor than T3. Diiodotyrosine did not affect phenolic ring deiodination in cultured rat hepatoma cell homogenates. Phenolic and nonphenolic ring deiodinase activities of cultured monkey hepatocarcinoma cell and rat liver homogenates were also studied by the use of 3,[3',5'-125I]triiodothyronine and [3,5-125I]thyroxine, respectively. Both deiodinase activities were observed in particulate fractions (mitochondrial and microsomal) of cultured cell and rat liver homogenates.