Glutamic acid decarboxylase (GAD), the synthesizing enzyme for the neurotransmitter gamma-aminobutyric acid (GABA), has been localized in a large number of neuronal somata within the nucleus reticularis thalami (NR) of rat brain by light microscopic immunocytochemical methods. GAD-positive staining of neuronal somata and proximal dendrites is observed in the NR of normal (untreated) rats, and this staining is substantially enhanced following colchicine injection into the lateral cerebral ventricle. GAD-positive neuronal cell bodies are prominent throughout the dorsoventral and rostrocaudal extents of the NR and, thus, form a band around the entire lateral aspect of the thalamus. In the lateral part of the NR, oval-shaped neurons with elongated GAD-positive dendritic processes are oriented parallel to the narrow axis of the NR and lie perpendicular to the penetrating fascicles of unstained thalamocortical and corticothalamic fibers. Semithin (2 micrometers) sections confirm that GAD-positive reaction product is contain within the cytoplasm of cell bodies and proximal dendrites. In addition, GAD-positive punctate structures, representing axon terminals, are present in the neuropil and, occasionally, are observed in close proximity to positively-stained neuronal somata. This finding suggests that GABA-mediated inhibition of GABA neurons may occur in the NR. The large number of GAD-positive cell bodies within the NR contrasts with a paucity of positively-stained somata in the more internally located thalamic nuclei. Within these nuclei, GAD-positive punctate structures that represent GABAergic synaptic sites are a characteristic feature. Since previous anatomical studies have demonstrated that a large proportion or reticularis neurons project into the thalamus, it is suggested that many of these GAD-positive punctate structures are the axon terminals of reticularis neurons. Through these projections, reticularis neurons may contribute to GABA-mediated inhibition within many of the thalamic nuclei.