While patients with rheumatoid arthritis (RA) sometimes demonstrate thyroidal illness, the role of thyroid hormones in inflamed synovial tissue is unknown. This is relevant because thyroid hormones stimulate immunity, and local cells can regulate thyroid hormone levels by deiodinases (DIO). The study followed the hypothesis that elements of a thyroid hormone network exist in synovial tissue. In 12 patients with RA and 32 with osteoarthritis (OA), we used serum, synovial fluid, synovial tissue, and synovial fibroblasts (SF) in order to characterize the local thyroid hormone network using ELISAs, immunohistochemistry, imaging methods, tissue superfusion studies, cell-based ELISAs, flow cytometry, and whole genome expression profiling. Serum/synovial fluid thyroid hormone levels were similar in RA and OA (inclusion criteria: no thyroidal illness). The degradation product termed reverse triiodothyronine (reverse T3) was much lower in serum compared to synovial fluid indicating biodegradation of thyroid hormones in the synovial environment. Superfusion experiments with synovial tissue also demonstrated biodegradation, particularly in RA. Cellular membrane transporters of thyroid hormones, DIOs, and thyroid hormone receptors were present in tissue and SF. Density of cells positive for degrading DIOs were higher in RA than OA. TNF increased protein expression of degrading DIOs in RASF and OASF. Gene expression studies of RASF revealed insignificant gene regulation by bioactive T3. RA and OA synovial tissue/SF show a local thyroid hormone network. Thyroid hormones undergo strong biodegradation in synovium. While bioactive T3 does not influence SF gene expression, SF seem to have a relay function for thyroid hormones.