The activity of the thalamus is state dependent. During slow-wave sleep, rhythmic burst firing is prominent, whereas during waking or rapid eye movement sleep, tonic, single-spike activity dominates. These state-dependent changes result from the actions of modulatory neurotransmitters. In the present study, we investigated the functional and cellular effects of the neuropeptide thyrotropin-releasing hormone (TRH) on the spontaneously active ferret geniculate slice. This peptide and its receptors are prominently expressed in the thalamic network, yet the role of thalamic TRH remains obscure. Bath application of TRH resulted in a transient cessation of both spindle waves and the epileptiform slow oscillation induced by application of bicuculline. With intracellular recordings, TRH application to the GABAergic neurons of the perigeniculate (PGN) or thalamocortical cells in the lateral geniculate nucleus resulted in depolarization and increased membrane resistance. In perigeniculate neurons, this effect reversed near the reversal potential for K+, suggesting that it is mediated by a decrease in K+ conductance. In thalamocortical cells, the TRH-induced depolarization was of sufficient amplitude to block the generation of rebound Ca2+ spikes, whereas the even larger direct depolarization of PGN neurons transformed these cells from the burst to tonic, single-spike mode of action potential generation. Furthermore, application of TRH prominently enhanced the afterdepolarization that follows rebound Ca2+ spikes, suggesting that this transmitter may also enhance Ca2+-activated nonspecific currents. These data suggest a novel role for TRH in the brain as an intrinsic regulator of thalamocortical network activity and provide a potential mechanism for the wake-promoting and anti-epileptic effects of this peptide.