Abstract Thyroid hormone formation requires the coincident presence of peroxidase, H 2O 2, iodide, and acceptor protein at one anatomic locus in the cell. The peroxidase enzyme appears to be a protoporphyrin IX containing heme protein, with binding sites for both iodide and tyrosine. It is probable that both iodide and tyrosine are oxidized to free radical forms which unite to form iodotyrosine. The peroxidase is also involved through an uncertain mechanism in iodotyrosine coupling and probably in oxidation of sulfhydryl bonds in thyroglobulin. H 2O 2 may be supplied by microsomal NADPH-cytochrome c reductase or NADH-cytochrome b 5 reductase. Other possible intracellular H 2O 2 generating systems include monoamine oxidase and xanthine oxidase. The usual acceptor for iodide is thyroglobulin, which is currently believed to be iodinated within apical secretory vesicles at the cell border just prior to liberation into the colloid, or possibly after liberation into the colloid. Other soluble and insoluble proteins are also iodinated within the gland. The peroxidase is present in numerous cellular structures, but iodination activity occurs primarily, if not only, at the apical cell border. The controls of iodination are imperfectly known. Thyrotrophin modulation of iodide uptake, H 2O 2 generation, thyroglobulin synthesis, and peroxidase enzyme level obviously are the main regulations. Many of these actions are thought to involve mediation of adenyl cyclase and subsequent activation of intracellular phosphokinases. Antithyroid drugs of the thiocarbamide group are competitive inhibitors of iodination under some circumstances, but if much iodide is present, they react with the oxidized iodine intermediate and are irreversibly inactivated themselves. Clinical problems involving defective peroxidase function are among the most frequent hereditary defects of thyroid hormone formation. Recognized abnormalities include deficient peroxidase, abnormality in binding of the peroxidase apoprotein to its prosthetic group, and other less well-identified abnormalities in peroxidase structure and function. Peroxidase is typically elevated in thyroid tissue from patients with hyperthyroidism, sometimes deficient in cold thyroid nodules, and frequently diminished in tissue from patients with Hashimoto's thyroiditis.