The type 3 iodothyronine deiodinase (D3) is the primary deiodinase that inactivates thyroid hormone. Immunoprecipitation of D3, followed by fluorescent two-dimensional difference gel electrophoresis and mass spectrometry, identified peroxiredoxin 3 (Prx3) as a D3-associated protein. This interaction was confirmed using reverse coimmunoprecipitation, in which pull-down of Prx3 resulted in D3 isolation, and by fluorescence resonance energy transfer between cyan fluorescent protein-D3 and yellow fluorescent protein-Prx3. Prx3 overexpression did not change D3 activity in transfected HEK 293 cells; however, Prx3 knockdown resulted in a 50% decrease in D3-mediated whole-cell deiodination. Notably, D3 activity of cell lysates with dithiothreitol as an exogenous reducing factor and D3 protein levels were not decreased with Prx3 knockdown, indicating that the observed reduction in whole-cell deiodination was not simply due to a decrease in D3 enzyme levels. Prx3 knockdown did not change D3's affinity for T3 because saturation of D3-mediated whole-cell deiodination occurred between 20 and 200 nm T3 both with and without Prx3. Furthermore, the decrease in D3 activity in whole cells was not attributable to nonspecific oxidative stress because pretreatment with the antioxidant N-acetyl cysteine did not reverse the effects of Prx3 knockdown. Thioredoxin, the cofactor needed for Prx3 regeneration, supported D3 microsomal activity; however, Prx3 knockdown did not change D3 activity in this system. In conclusion, knockdown of Prx3 decreases D3 activity in whole cells, whereas absolute levels of D3 are unchanged, consistent with Prx3 playing a rate-limiting role in the regeneration of the D3 enzyme.