Iodide is a well known halogen necessary for development. The majority of iodide processing in biological systems occurs in the thyroid gland. Iodide salvage is essential to thyroid hormone metabolism and metabolic regulation. The DEHAL1 gene product iodotyrosine deiodinase (IYD) is responsible for deiodination of the mono- and diiodotyrosine byproducts of thyroid hormone synthesis (triiodothyronine and thyroxine, T3 and T4, respectively). IYD is a membrane-bound flavoprotein comprised of three domains with the catalytic domain belonging to the NADH oxidase/flavin reductase structural superfamily. This enzyme required engineering for expression of soluble protein in E. coli and was characterized using CD spectra, kinetic rate constants, binding constants of substrates, and crystal structure. Analysis of the crystal structure of IYD indicates a dimer with an active site comprising of both monomers and orienting the C-I bond of iodotyrosine substrate stacking above the N5 of the flavin mononucleotide (FMN) required for activity. The crystal structure also identifies an active site lid that distinguishes IYD from other proteins in the NADH oxidase/flavin reductase superfamily. Three amino acids (E153, Y157, and K178) on the active site lid form hydrogen bonding and electrostatic contacts with the zwitterionic portion of the substrate. Mutation to any of these three amino acids significantly decreases substrate-binding affinity and enzymatic activity. Homologous sequences of IYD were identified in other organisms and four sequences as representatives from their phyla were expressed in E. coli. Zebrafish, lancelets, honeybees, and sea anemones each have a protein that acts as a deiodinase.