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The current treatment for patients with hypothyroidism is levothyroxine (L-T4) along with normalization of serum thyroid-stimulating hormone (TSH). However, normalization of serum TSH with L-T4 monotherapy results in relatively low serum 3,5,3′-triiodothyronine (T3) and high serum thyroxine/T3 (T4/T3) ratio. In the hypothalamus-pituitary dyad as well as the rest of the brain, the majority of T3 present is generated locally by T4 deiodination via the type 2 deiodinase (D2); this pathway is self-limited by ubiquitination of D2 by the ubiquitin ligase WSB-1. Here, we determined that tissue-specific differences in D2 ubiquitination account for the high T4/T3 serum ratio in adult thyroidectomized (Tx) rats chronically implanted with subcutaneous L-T4 pellets. While L-T4 administration decreased whole-body D2-dependent T4 conversion to T3, D2 activity in the hypothalamus was only minimally affected by L-T4. In vivo studies in mice harboring an astrocyte-specific Wsb1 deletion as well as in vitro analysis of D2 ubiquitination driven by different tissue extracts indicated that D2 ubiquitination in the hypothalamus is relatively less. As a result, in contrast to other D2-expressing tissues, the hypothalamus is wired to have increased sensitivity to T4. These studies reveal that tissue-specific differences in D2 ubiquitination are an inherent property of the TRH/TSH feedback mechanism and indicate that only constant delivery of L-T4 and L-T3 fully normalizes T3-dependent metabolic markers and gene expression profiles in Tx rats.