GABAergic inhibition synchronizes oscillatory activity in the thalamocortical system. To understand better the role of this neurotransmitter in generation of thalamocortical rhythmicity, the postnatal development of GABAergic function mediated through activation of GABAA receptors was studied in thalamus and cortex. GABA-evoked chloride currents were recorded in dissociated rat cortical and thalamic neurons during postnatal development. Kinetic fits of GABA concentration/response relationships revealed developmental and regional alterations in the potency of GABA. Early in postnatal development (p5-p8), both thalamic and cortical neurons exhibited reduced potency of GABA (27–31 microM KD). Potency increased by p18-p25 in thalamic and cortical neurons (19–22 microM KD), to a level maintained in adult thalamic neurons. Adult cortical neurons exhibited reduced potency of GABA (40 microM KD). Benzodiazepine modulation of GABAA currents was also studied. Kinetic analyses of benzodiazepine augmentation of GABAA currents were best fitted assuming two effective sites with different affinities for clonazepam. The high-affinity site (KD of 0.05–0.27 nM) showed little variation with development in cortical neurons, contributing about 16–23% potentiation at all postnatal ages. Developing thalamic neurons (p5-p25) showed similar potency and efficacy of the high-affinity benzodiazepine site to cortical neurons. High-affinity benzodiazepine effects disappeared in adult thalamic neurons. A lower-affinity benzodiazepine site (25–50 nM KD) was greater in efficacy in cortical neurons compared to thalamic neurons at all ages, with efficacy ranging from 50% to 110% in cortex and from 20% to 60% in thalamus. Knowledge of developmental and regional alterations in GABAA receptor function may aid in understanding mechanisms involved in generation and control of normal and pathological thalamocortical rhythms.