Deiodinase type 2 (D2) is a thyroid hormone-activating enzyme converting the prohormone T4 into the active hormone T3. In the present study, we show for the first time that D2 is up-regulated in the mouse liver during acute and chronic inflammation, in close correlation with the proinflammatory cytokine IL-1β and independently of serum T3. Inflammation-induced D2 expression was confirmed in macrophages, in conjunction with selective thyroid hormone transporter (monocarboxylate transporter 10) and thyroid hormone receptor (TR)α1 stimulation, and was absent in hepatocytes. Moreover, D2 knockdown in macrophages resulted in a clear attenuation of the lipopolysaccharide (LPS)-induced IL-1β and GM-CSF expression, in addition to aberrant phagocytosis. Locally produced T3, acting via the TRα, may be instrumental in this novel inflammatory response, because LPS-treated TRα(0/0) mice showed a markedly decreased LPS-induced GM-CSF mRNA expression. We now propose that hepatic D2 favors the innate immune response by specifically regulating cellular thyroid hormone levels in macrophages.