Thyroid hormone is important for neurodevelopment. Although considerable attention has been paid to the functions of this hormone in brain, less is known of its role in sensory systems. Using targeted mutagenesis of thyroid hormone receptors (TR), we have found that TRb isoforms, encoded by the Thrb gene, mediate critical functions in the auditory and colour visual systems. These systems reveal the versatility of thyroid hormone signaling as well as novel functions. The auditory system provides a complex paradigm in which TRb coordinates the differentiation of many cochlear cell types, including sensory hair cells, prior to the onset of hearing. Evidence implicates other factors in determining the developmental timing. Type 2 deiodinase which converts thyroxine (T4) into tri-iodothyronine (T3), the major ligand of the receptor, is induced in the postnatal cochlea. Our findings indicate that type 2 deiodinase confers upon the cochlea the ability to stimulate its own maturation by amplifying T3 ligand levels locally at a key stage of development. Colour vision illustrates a different paradigm of TR action, and concerns the differentiation of a specific cell type, the cone photoreceptor. Cones differentially express opsin photopigments for sensitivity to short (S, blue) or medium (M, green) wavelengths of light. The TRb2 isoform is expressed in cones. In TRb2-deficient mice, M opsin is lost and all cones instead express S opsin. Thus, TRb2 is essential for diversifying cones into S and M sub-types.