Thalamostriatal projections arising from the posterior intralaminar nuclei (P1; the parafascicular nucleus and the adjacent caudalmost part of the posterior thalamic group) were studied in rats by tracing the axons of small pools of neurons labelled anterogradely with biocytin. Thirteen P1 cells were also stained by juxta cellular application of the tracer. Relay cells of P1 nuclei have a morphology that differs radically from the classical descriptions of the bushy cells which represent the main neuronal type of the sensory thalamic relay nuclei. P1 cells have ovoid or polygonal somata of approximately 20-25 microm, from which emerge four or five thick, long and poorly branched dendrites bearing spines and filamentous appendages; their dendritic domains extend for up to 1.5 mm. Before leaving the nucleus 20% of axons give off collaterals that ramify locally. All axons course through the thalamic reticular nucleus, where they also distribute collaterals, and arborize massively in the striatum and sparsely in the cerebral cortex. At the striatal level four or five collaterals leave the main axon and terminate in patches scattered dorsoventrally within a rostrocaudally oriented slab. As revealed by calbindin D-28k immunohistochemistry, only the matrix compartment receives terminations from P1 axons. The cortical branch form small terminal puffs centred upon layer VI of the motor cortex. Before entering the striatum some axons of the parafascicular nucleus give rise to descending collaterals that arborize in the entopeduncular nucleus, in the subthalamic nucleus and in the vicinity of the red nucleus. Other axons arising from the caudal part of the posterior group send descending branches only to the entopeduncular nucleus. These findings show that P1 cells belong to a distinct category of thalamic relay neurons which, beside their massive projection to the striatum, also distribute collaterals to other components of the basal ganglia. Moreover, these results provide the first direct evidence that virtually all P1 cells project to both striatum and cerebral cortex. Finally, it is proposed on the basis of morphological, histochemical and hodological criteria that the caudal part of the posterior thalamic group in the rat is homologous to the suprageniculate-limitans nuclei of cats and primates.