The iodothyronine deiodinases are a family of oxidoreductases that catalyze the removal of iodide from thyroid hormones. Each of the three isoforms contain selenocysteine at its active site and several cysteine residues that may be important for catalytic activity. Of particular interest in the type I deiodinase (D1) is Cys124, which is vicinal to the selenocysteine at position 126, and Cys194, which has been conserved in all deiodinases identified to date. In the present studies, we have characterized the functional properties of C124A, C194A, and C124A/C194A D1 mutants, which were prepared by site-directed mutagenesis and expressed in COS-7 cells. In broken cell preparations, the sensitivity of the mutants to the selective D1 inhibitors propylthiouracil and aurothioglucose were unaltered. Mutagenesis at the Cys124 position was associated with a 7-11-fold increase in the Km of dithiothreitol, whereas Vmax values remained largely unchanged. However, both mutations resulted in marked decreases in Vmax values when glutathione or a reconstituted thioredoxin cofactor system were used in the assay. In contrast to the results of these in vitro studies, no impairment in deiodinating capability was noted in intact cells expressing equivalent levels of the mutant constructs. These studies demonstrate that Cys124 and Cys194 influence the reactivity of the D1 with thiol cofactors in in vitro assay systems but are not determinants of the sensitivity of the enzyme to propylthiouracil and aurothioglucose. Furthermore, the observation that the cysteine mutants are fully active in intact cells demonstrates that the results of commonly used broken cell assays do not accurately predict the activity of the D1 in intact cells and suggests that glutathione and thioredoxin are not the major thiols utilized in vivo to support D1 activity.