The metabolism of T3 by isolated rat hepatocytes was analyzed by Sephadex LH-20 chromatography, HPLC, and RIA for T3 sulfate (T3S) and 3,3'-diiodothyronine (3,3'-T2). Type I iodothyronine deiodinase activity was inhibited with propylthiouracil (PTU), and phenol sulfotransferase activity by SO4(2-) depletion or with competitive substrates or inhibitors. Under normal conditions, labeled T3 glucuronide and I- were the main products of [3'-125I]T3 metabolism. Iodide production was decreased by inhibition (PTU) or saturation (greater than 100 nM T3) of type I deiodinase, which was accompanied by the accumulation of T3S and 3,3'-T2S. Inhibition of phenol sulfotransferase resulted in decreased iodide production, which was associated with an accumulation of 3,3'-T2 and 3,3'-T2 glucuronide, independent of PTU. Formation of 3,3'-T2 and its conjugates was only observed at T3 substrate concentrations below 10 nM. Thus, T3 is metabolized in rat liver cells by three quantitatively important pathways: glucuronidation, sulfation, and direct inner ring deiodination. Whereas T3 glucuronide is not further metabolized in the cultures, T3S is rapidly deiodinated by the type I enzyme. As confirmed by incubations with isolated rat liver microsomes, direct inner ring deiodination of T3 is largely mediated by a low Km, PTU-insensitive, type III-like iodothyronine deiodinase, and production of 3,3'-T2 is only observed if its rapid sulfation is prevented.