The type 1 deiodinase (D1) catalyzes the monodeiodination of T4 to produce T3, the active thyroid hormone. In the C3H mouse, hepatic D1 and the dio1 messenger RNA (mRNA) are only 10% that in the C57 strain, the common phenotype. Low activity cosegregated with a series of five GCT repeats located in the 5'-flanking region of the C3H dio1 gene that impaired C3H promoter potency and provided a partial explanation for the lower D1. The present studies were performed to search for additional explanations for low D1 activity in C3H mice. Previous studies have shown that T3 up-regulates the dio1 gene. Therefore, loss of the capacity to respond to endogenous T3 is a possible additional cause of the lower D1 levels in the C3H mice. The hepatic C3H dio1 mRNA increases 10- to 20 fold after T3 administration. The t3 effect occurs at a transplantation level and T3 does not alter the dio1 mRNA half-life. Despite the transcriptional response to T3, no functional thyroid response elements were identified in the 1.5-kilobase 5'-flanking region of either the C57 or C3H dio1 gene. After the same dose of exogenous T3, both dio1 mRNA and D1 of the C3H mouse respond to a greater extent than those of the C57 strain. This can be explained in part by the reduction in T3 clearance due to the lower D1 levels in C3H mice in which higher concentrations of circulating T3 are maintained. The decrease in serum T3 levels and T3 production observed in fasting and systemic illness in both human and experimental animals has been attributed in part to a decrease in hepatic D1. In contrast, despite markedly lower hepatic and renal D1 levels, serum T3 concentrations remain normal in C3H mice. The present studies suggest that the absence of stress-induced hypothalamic-pituitary suppression that allows T4 production to be maintained together with the reduced clearance of T3 and T4 via inner ring deiodination compensate for the D1 deficiency.