Background: Inflammation is associated with marked changes in cellular thyroid hormone (TH) metabolism in triiodothyronine (T3) target organs. In the hypothalamus, type 2 deiodinase (D2), the main T3 producing enzyme, increases upon inflammation, leading to an increase in local T3 availability, which in turn decreases thyrotropin releasing hormone expression in the paraventricular nucleus. Type 3 deiodinase (D3), the T3 inactivating enzyme, decreases during inflammation, which might also contribute to the increased T3 availability in the hypothalamus. While it is known that D2 is regulated by nuclear factor κB (NF-κB) during inflammation, the underlying mechanisms of D3 regulation are unknown. Therefore, the aim of the present study was to investigate inflammation-induced D3 regulation using in vivo and in vitro models. Methods: Mice were injected with a sublethal dose of bacterial endotoxin (lipopolysaccharide [LPS]) to induce a systemic acute-phase response. A human neuroblastoma (SK-N-AS) cell line was used to test the involvement of the thyroid hormone receptor alpha 1 (TRα1) as well as the activator protein-1 (AP-1) and NF-κB inflammatory pathways in the inflammation-induced decrease of D3. Results: D3 expression in the hypothalamus was decreased 24 hours after LPS injection in mice. This decrease was similar in mice lacking the TRα. Incubation of SK-N-AS cells with LPS robustly decreased both D3 mRNA expression and activity. This led to increased intracellular T3 concentrations. The D3 decrease was prevented when NF-κB or AP-1 was inhibited. TRα1 mRNA expression decreased in SK-N-AS cells incubated with LPS, but knockdown of the TRα in SK-N-AS cells did not prevent the LPS-induced D3 decrease. Conclusions: We conclude that the inflammation-induced D3 decrease in the hypothalamus is mediated by the inflammatory pathways NF-κB and AP-1, but not TRα1. Furthermore, the observed decrease modulates intracellular T3 concentrations. Our results suggest a concerted action of inflammatory modulators to regulate both hypothalamic D2 and D3 activities to increase the local TH concentrations.