We have recently demonstrated that serum concentration of 3,5,3'-triiodothyronine sulfate (T3S) is markedly elevated in the human newborn at a time when serum 3,5,3'-triiodothyronine (T3) is very low. The present study explores the ability of maternal (19-21 d pregnant) and near-term fetal Sprague-Dawley rat tissues to 1) monodeiodinate T3S and T3 in both the outer and the inner ring and 2) desulfate T3S to T3. Maternal liver microsomes metabolized T3S exceedingly efficiently (compare fetus p less than 0.05). Eighty percent or more of T3S was consumed during its incubation with 360 micrograms/mL microsomes for 2 h. The majority of the consumption of T3S by adult liver microsomes occurred by its 5'-monodeiodination to I-; little inner-ring monodeiodination to 3,3'-diiodothyronine was demonstrable. In fetal liver microsomes, however, over 75% of the substrate T3S remained unchanged after a 2-h incubation. T3 was metabolized similarly moderately by fetal and maternal liver microsomes. Brain microsomes metabolized T3S poorly in both the mother and the fetus. Over 90% of substrate T3S remained unchanged after a 2-h incubation in each case. Interestingly, brain microsomes metabolized T3 more rapidly than T3S (p less than 0.05). In the fetus, desulfation of T3S to T3 was clearly evident only in microsomes from the liver and the brain; in the adult, it was plentiful in many tissues. Fetal liver and brain tissues metabolize T3S poorly, and both actively desulfate T3S to T3. These data and those indicating high serum T3S in the fetus suggest that T3S is a local source of T3 in critical tissues in the fetus and possibly in adults with the low T3 syndrome.