Polybrominated diphenyl ethers (PBDEs) are routinely found in human tissues including cord blood and breast milk. PBDEs may interfere with thyroid hormone (TH) during development, which could produce neurobehavioral deficits. An assumption in experimental and epidemiological studies is that PBDE effects on serum TH levels will reflect PBDE effects on TH action in tissues. To test whether this assumption is correct, we performed the following experiments. First, five concentrations of diphenyl ether (0-30 mg/kg) were fed daily to pregnant rats to postnatal day 21. PBDEs were measured in dam liver and heart to estimate internal dose. The results were compared with a separate study in which four concentrations of propylthiouracil (PTU; 0, 1, 2, and 3 ppm) was provided to pregnant rats in drinking water for the same duration as for diphenyl ether. PBDE exposure reduced serum T4 similar in magnitude to PTU, but serum TSH was not elevated by PBDE. PBDE treatment did not affect the expression of TH response genes in the liver or heart as did PTU treatment. PTU treatment reduced T4 in liver and heart, but PBDE treatment reduced T4 only in the heart. Tissue PBDEs were in the micrograms per gram lipid range, only slightly higher than observed in human fetal tissues. Thus, PBDE exposure reduces serum T4 but does not produce effects on tissues typical of low TH produced by PTU, demonstrating that the effects of chemical exposure on serum T4 levels may not always be a faithful proxy measure of chemical effects on the ability of thyroid hormone to regulate development and adult physiology.