Ascending pathways mediated by monoamine neurotransmitters regulate the firing mode of thalamocortical neurons and modulate the state of brain activity. We hypothesized that specific neuropeptides might have similar actions. The effects of vasoactive intestinal peptide (VIP) and pituitary adenylate cyclase-activating polypeptide (PACAP) were tested on thalamocortical neurons using whole-cell patch-clamp techniques applied to visualized neurons in rat brain slices. VIP (2 microm) and PACAP (100 nm) reversibly depolarized thalamocortical neurons (7.8 +/- 0.6 mV; n = 16), reduced the membrane resistance by 33 +/- 3%, and could convert the firing mode from bursting to tonic. These effects on resting membrane potential and membrane resistance persisted in the presence of TTX. Morphologically diverse thalamocortical neurons located in widespread regions of thalamus were all depolarized by VIP and PACAP38. In voltage-clamp mode, we found that VIP and PACAP38 reversibly activated a hyperpolarization-activated cationic current (I(H)) in thalamocortical neurons and altered voltage- and time-dependent activation properties of the current. The effects of VIP on membrane conductance were abolished by the hyperpolarization-activated cyclic-nucleotide-gated channel (HCN)-specific antagonist ZD7288, showing that HCN channels are the major target of VIP modulation. The effects of VIP and PACAP38 on HCN channels were mediated by PAC(1) receptors and cAMP. The actions of PACAP-related peptides on thalamocortical neurons suggest an additional and novel endogenous neurophysiological pathway that may influence both normal and pathophysiological thalamocortical rhythm generation and have important behavioral effects on sensory processing and sleep-wake cycles.