To elucidate the regulatory mechanism of ontogenetic development of iodothyronine-5''-deiodinase in the fetal and neonatal period, fetal mouse liver of the 19th day of gestation, in which no iodothyronine-5''-deiodinating activity was detectable, was cultured in Dulbecco-Vogt medium supplemented with 10% thyroid hormone-depleted fetal calf serum, insulin, hydrocortisone and thyroid hormones. Iodothyronine-5''-deiodinating activity of the homogenate was assessed by the amount of iodide released from outer-ring-labeled reverse T3 [triiodothyronine] and expressed as pmol of 127I-/mg of protein per min. The enzyme activity was induced in a dose-dependent manner; optimal concentrations for insulin, hydrocortisone and thyroxine were 1 .mu.g/ml, 0.4 .mu.g/ml and 10-6 M, respectively. Without supplementation of either hydrocortisone or thyroxine, no 5''-deiodination was detected. The enzyme activity was observed after 3 d [day] of culture, peaked at 14-20 d and then gradually decreased. Lineweaver-Burk analysis revealed that the increase in activity was primarily due to an increase in Vmax (at 3 d, 0.2 pmol/mg protein per min; 20/2.5 pmol/mg protein per min). Half maximal thyroxine (T4) and T3 concentrations were 1 .times. 10-7 M (free T4: 4 .times. 10-10 M), and 2 .times. 10-9 M (free T3; 5.0 .times. 10-11 M), respectively, whereas reverse T3 did not elicit any activity at 10-8-10-6 M. Ontogenetic development of iodothyronine-5''-deiodinase in the liver of the fetal and neonatal mouse evidently is induced by physiological concentrations of glucocorticoid and thyroid hormones. Insulin may play a permissive role in enhancing T3 formation from T4 in the liver.