Thalamocortical oscillations mediate both physiological and pathophysiological behaviors including sleep and generalized absence epilepsy (GA). Reciprocal intrathalamic circuitry and robust burst firing, dependent on underlying transient Ca current (IT) in thalamic neurons, support generation of such rhythms. In order to study the regulation of intrathalamic rhythm generation and the effects of GA anticonvulsants previously shown to reduce IT in acutely isolated thalamic neurons, we developed an in vitro rat thalamic slice preparation that retains sufficient intrathalamic circuitry to support evoked oscillations (range = 2.0–4.6 Hz, average = 2.7, n = 38), associated with burst firing in the thalamic reticular nucleus (nRt) and thalamic relay neurons. Extracellular stimulation of nRt evoked in relay neurons a biphasic inhibitory response with prominent GABAA and GABAB receptor-mediated components. The GABAA component was picrotoxin sensitive, outwardly rectifying and Cl- dependent, with a very negative reversal potential (-94 mV), indicating that an active extrusion mechanism exists in these cells to keep [Cl-]i < 5 mM. The GABAB component had a linear conductance, a reversal potential of -103 mV, and was quite long lasting (about 300 msec) so that rebound bursts often were generated on its decay phase, presumably leading to reexcitation of nRt through known excitatory connections. GABAB- mediated responses thus provide a timing mechanism for promoting slow intrathalamic oscillations. Reduction of IT (30–40%) by succinimides slightly increased the threshold for burst generation in relay and nRt cells, but there was little effect on either number of spikes/burst or intraburst frequency, and there were no other direct effects on other measures of cellular excitability. Intrathalamic oscillations were significantly reduced by these agents through a slight decrease in burst probability of thalamic neurons. We conclude that interactions between the intrinsic properties of thalamic neurons and intrathalamic circuitry lead to generation of slow oscillations. A similar mechanism may underlie the pathophysiological 3 Hz spike and wave EEG activity that characterizes GA. Furthermore, anti-GA drugs such as ethosuximide probably exert their action by reducing the burst-firing probability of neurons within populations of reciprocally interconnected relay and nRt neurons, thus producing a desynchronization of the thalamic circuit that prevents spike/wave generation.