Type 2 iodothyronine deiodinase, an enzyme involved in the conversion of thyroxin to the biologically active 3,5, 3'-triiodothyronine, is highly concentrated in a group of specialized ependymal cells, tanycytes, lining the wall and floor of the third ventricle. As this distribution is highly reminiscent of the distribution of cells containing the phosphatase inhibitor, DARPP-32, we raised the possibility that these two proteins may coexist in tanycytes and that DARPP-32 may modulate type 2 deiodinase activity by regulating the phosphorylation state of the cAMP regulatory factor, CREB. To address this question, double-labeling histochemical studies were performed for type 2 deiodinase mRNA and DARPP-32 immunoreactivity (IR), or DARPP-32- and CREB-IR in the same tissue sections. Type 2 deiodinase mRNA was found in the cell bodies of all DARPP-32-immunolabeled tanycytes. Both type 2 deiodinase mRNA and DARPP-32-IR also extended into tanycyte processes that ramified in the arcuate nucleus and median eminence, in close association with blood vessels and portal capillaries. In contrast, type 2 deiodinase mRNA was not present in the same cells that contained DARPP-32-IR in the pituitary gland. All tanycytes containing DARPP-32-IR also contained CREB-IR in their nucleus. Since type 2 deiodinase activity can be induced by substances that increase cAMP, we hypothesize that DARPP-32 may regulate the activity of type 2 deiodinase by prolonging the activation of CREB. Selectivity for the colocalization of these factors to tanycytes but not the pituitary gland, may explain the heterogeneous response of type 2 deiodinase activity in these two loci in response to specific stimuli such as fasting.