A method has been developed for the isolation of cells, high in iodine uptake and peroxidase activity, from the stomach and submaxillary gland of mice. The isolated cells could produce protein-bound monoiodotyrosine, di-iodotyrosine and an unknown iodocompound. The reactions were catalysed by peroxidase and were sensitive to antithyroid drugs and haemoprotein inhibitors but were insensitive to TSH. In-vitro iodination of stomach or submaxillary soluble proteins with the respective peroxidase yielded similar iodocompounds while thyroxine was produced when thyroglobulin was used instead.