Enables thyroxine 5-deiodinase activity. Acts upstream of or within several processes, including pharyngeal system development; regulation of neural retina development; and swimming behavior. Predicted to be located in endomembrane system and membrane. Is expressed in several structures, including brain; eye; liver; pleuroperitoneal region; and yolk. Orthologous to human DIO3 (iodothyronine deiodinase 3).