Thyroid hormone regulates immune functions and has antiinflammatory effects. In promoter assays, the thyroid hormone-activating enzyme, type 2 deiodinase (D2), is highly inducible by the inflammatory transcription factor nuclear factor-κ B (NF-κB), but it is unknown whether D2 is induced in a similar fashion in vivo during inflammation. We first reexamined the effect of bacterial lipopolysaccharide (LPS) on D2 expression and NF-κB activation in the rat and mouse brain using in situ hybridization. In rats, LPS induced very robust D2 expression in normally non-D2-expressing cells in the leptomeninges, adjacent brain blood vessels, and the choroid plexus. These cells were vimentin-positive fibroblasts and expressed the NF-κB activation marker, inhibitor κ B-α mRNA, at 2 hours after injection, before the increase in D2 mRNA. In mice, LPS induced intense D2 expression in the choroid plexus but not in leptomeninges, with an early expression peak at 2 hours. Moderate D2 expression along numerous brain blood vessels appeared later. D2 and NF-κB activation was induced in tanycytes in both species but with a different time course. Enzymatic assays from leptomeningeal and choroid plexus samples revealed exceptionally high D2 activity in LPS-treated rats and Syrian hamsters and moderate but significant increases in mice. These data demonstrate the cell type-specific, highly inducible nature of D2 expression by inflammation, and NF-κB as a possible initiating factor, but also warrant attention for species differences. The results suggest that D2-mediated T₃ production by fibroblasts regulate local inflammatory actions in the leptomeninges, choroid plexus and brain blood vessels, and perhaps also in other organs.