1. The mechanisms of action of adenosine were examined in relay neurones of the dorsal lateral geniculate nucleus (LGND) using in vitro intracellular recording techniques in guinea-pig thalamic slices. 2. Adenosine hyperpolarized LGND relay neurones due to an increase in membrane potassium conductance. The K+ currents generated by near maximal stimulation of adenosine and GABAB receptors were non-additive. 3. Blockage of membrane K+ conductances by barium unmasked a second response to adenosine; an outward shift of the current versus voltage relationship negative to -65 mV associated with an increase in membrane input resistance. The beta-adrenoceptor agonist isoprenaline elicited an inward current in the same voltage range, which was inhibited and replaced by an outward current during activation of adenosine receptors. The effects of adenosine were due to a decrease in amplitude and rate of rise of the hyperpolarization-activated cation current, Ih. Maximal reduction by 66% of Ih amplitude occurred near the range of half-activation. 4. Both responses to adenosine were mimicked by the selective A1 receptor agonists N6-cyclopentyladenosine or N6-cyclohexyladenosine, and reversibly blocked by the selective A1 receptor antagonist 8-cyclopentyl-1,3-dipropylxanthine (DPCPX). 5. The decrease in Ih by adenosine may be mediated by an inhibition of adenylyl cyclase activity and hence a decrease in the intracellular level of cyclic AMP, since local application of the adenylyl cyclase inhibitor 2',3'-dideoxyadenosine imitated the decrease in Ih. Local application of the adenylyl cyclase stimulant forskolin or 8-bromo-cyclic AMP resulted in an enhancement in Ih, and forskolin inhibited the action on Ih evoked by N6-cyclopentyladenosine. 6. The adenosine-induced effects interacted with the intrinsic electrophysiological properties of LGND neurones in that (i) the hyperpolarization due to an increase in K+ conductance inhibited single spike firing and promoted calcium-mediated burst discharges, and (ii) the decrease in Ih inhibited the dampening effect on Ca(2+)-mediated rebound activity of beta-adrenergic receptor stimulation. 7. It is suggested that during increased levels of extracellular adenosine the response of LGND relay neurones to activating brainstem influences will be depressed, and a pattern of Ca(2+)-mediated burst firing will be favoured.