 Solution

Choose mutually inverse maps $i:D^D\to D$ and $j:D\to D^D$. This is an extensional reflexive object in the Cartesian closed category. Define its application morphismFor endomorphisms $f,g:D\to D$, application in the underlying set $\mathrm{End}(D)$ is $f\cdot g=\mathrm{app}\circ ⟨f,g⟩$.

It is useful to define term interpretation uniformly over any context object $A$. An environment assigns each free variable $x$ a morphism $\rho (x):A\to D$. Variables are interpreted by their assigned maps, and application is interpreted by $\mathrm{app}$ and pairing. For lambda abstraction, lift the old environment along ${\pi }_A:A\times D\to A$, interpret the new variable by ${\pi }_D$, and let $h:A\times D\to D$ interpret the body. Then setTaking $A=D$ gives interpretations in the requested set of endomorphisms. Other context objects are needed in the recursive definition to handle bound variables correctly.

The beta reduction rule follows from $ji={\mathrm{id}}_{D^D}$ and the evaluation identity for currying. Applying the interpreted abstraction to a map $g:A\to D$ givesInduction on terms identifies this with interpretation of the capture-avoiding substitution of the argument for $x$.

For eta conversion, suppose $x$ is not free in $M$ and write $f:A\to D$ for the interpretation of $M$. The body $Mx$ on $A\times D$ is the uncurried form of $jf$. HenceThus beta-eta-equivalent terms have equal interpretations in $\mathrm{End}(D)$. The full isomorphism, rather than just a retract of the function object, provides the inverse law used in the eta step.