Type 2 deiodinase (DZ) is a low K-m iodothyronine deiodinase that catalyzes the removal of a single iodine from the phenolic ring of T-4 or rT(3). We sequenced and subcloned the open reading frame from a partial complementary DNA (cDNA) clone (2.1 kilobases) prepared by Genethon (Z44085) from a human infant brain cDNA library. The open reading frame encodes a putative 273-amino acid protein of 31 kDa with greater than 70% similarity to the Rana catesbeiana D2 protein. Transient expression of the cDNA produces a low K-m (5 nM for T-4; 8 nM for rT(3)) propylthiouracil- and gold thioglucose-resistant 5'-deiodinase in 293-HEK cells. Human D2, like human type 1 (D1) and type 3 (D3) deiodinases, is a selenoenzyme, as evidenced by 1) the presence of two in-frame UGA codons (positions 133 and 266), 2) the synthesis of a 31-kDa Se-75-labeled protein in D2 cDNA-transfected cells, and 3) the requirement for a 3'-selenocysteine incorporation sequence element for its translation. Unlike D1 and D3, we were not able to covalently label overexpressed D2 with N-bromoacetyl [I-125]T-3 or -T-4. We found that the human D2 messenger RNA is 7-8 kilobases and is expressed in brain, placenta, and, surprisingly, cardiac and skeletal muscle. Type 2 deiodinase activity was also present in human skeletal muscle. These results indicate that there are unique features of D2 that distinguish it from the two other seleno-deiodinases. The expression of D2 in muscle suggests that it could play a role in peripheral, as well as intracellular, T-3 production.