Iodine's main role in animal biology is as constituents of the thyroid hormones, thyroxine (T4) and triiodothyronine (T3). These are made from addition condensation products of the amino acid tyrosine, and are stored prior to release in an iodine-containing protein called thyroglobulin. T4 and T3 contain four and three atoms of Iodine per molecule, respectively. The thyroid gland actively absorbs Iodine from the blood to make and release these hormones into the blood, actions which are regulated by a second hormone TSH from the pituitary. Thyroid hormones are phylogenetically very old molecules which are synthesized by most multicellular organisms, and which even have some effect on unicellular organisms.
Thyroid hormones play a basic role in biology, acting on gene transcription to regulate the basal metabolic rate. The total deficiency of thyroid hormones can reduce basal metabolic rate up to 50%, while in excessive production of thyroid hormones the basal metabolic rate can be increased by 100%. T4 acts largely as a precursor to T3, which is (with minor exceptions) the biologically active hormone.
Iodine has a nutritional relationship with selenium. A family of selenium-dependent enzymes called deiodinases converts T4 to T3 (the active hormone) by removing an Iodine atom from the outer tyrosine ring. These enzymes also convert T4 to reverse T3 (rT3) by removing an inner ring iodine atom; and convert T3 to 3,3'-Diiodothyronine (T2) also by removing an inner ring atom. Both of the latter are inactivated hormones which are ready for disposal and have essentially no biological effects. A family of non-selenium dependent enzymes then further deiodinates the products of these reactions.
Selenium also plays a very important role in the production of Glutathione, the body's most powerful antioxidant. During the production of thyroid hormones, hydrogen peroxide is produced, high Iodine in the absence of selenium destroys the thyroid gland (often felt as a sore throat feeling), the peroxides are neutralized through the production of glutathione from selenium. In turn an excess of selenium increases demand for iodine, and deficiency will result when a diet is high in selenium and low in iodine. http://en.wikipedia.org/wiki/Iodine_in_biology