Thyroid hormone plays an essential role in mammalian brain maturation and function, in large part by regulating the expression of specific neuronal genes. In this tissue, the type 2 deiodinase (D2) appears to be essential for providing adequate levels of the active thyroid hormone 3,5,3'-triiodothyronine (T3) during the developmental period. We have studied the regional and cellular localization of D2 mRNA in the brain of 15-day-old neonatal rats. D2 is expressed in the cerebral cortex, olfactory bulb, hippocampus, caudate, thalamus, hypothalamus, and cerebellum and was absent from the white matter. At the cellular level, D2 is expressed predominantly, if not exclusively, in astrocytes and in the tanycytes lining the third ventricle and present in the median eminence. These results suggest a close metabolic coupling between subsets of glial cells and neurons, whereby thyroxine is taken up from the blood and/or cerebrospinal fluid by astrocytes and tanycytes, is deiodinated to T3, and then is released for utilization by neurons.