The type 3 deiodinase (D3) inactivates thyroid hormone action by catalyzing tissue-specific inner ring deiodination, predominantly during embryonic development. D3 has gained much attention as a player in the euthyroid sick syndrome, given its robust reactivation during injury and/or illness. While much of the structure biology of the deiodinases is derived from studies with D2, a dimeric endoplasmic-reticulum obligatory activating deiodinase, little is known about the holostructure of the plasma membrane-resident D3, the deiodinase capable of thyroid hormone inactivation. Here we used fluorescence resonance energy transfer (FRET) in live cells to demonstrate that D3 exists as homodimer. While D3 homodimerized in its native state, minor heterodimerization was also observed between D3:D1 and D3:D2 in intact cells, the significance of which remains elusive. Incubation with 0.5–1.2 M urea resulted in loss of D3 homodimerization as assessed by bioluminescence resonance energy transfer (BRET) and a proportional loss of enzyme activity, to a maximum of 50%. Protein modeling using a D2-based scaffold identified potential dimerization surfaces in the transmembrane and globular domains. Truncation of the transmembrane domain (D3) abrogated dimerization and deiodinase activity except when co-expressed with full-length catalytically inactive deiodinase, thus assembled as D3:D3 dimer; thus the D3 globular domain also exhibits dimerization surfaces. In conclusion, the inactivating deiodinase D3 exists as homo- or heterodimer in living intact cells, a feature that is critical for their catalytic activities.