The thalamus, known as the pacemaker for spindle rhythms in sleep, has several enabling features that promote such pacemaking. These include a circuitry that interconnects large groups of excitatory and inhibitory neurons, all of which are essentially capable of firing high-frequency 'bursts' of discharges. Bursts in thalamic reticular neurons produce powerful inhibition in thalamic relay neurons, which leads to rebound excitation. The timing properties of the inhibition regulate the network activity by controlling rebound burst latency. Anatomical features within thalamus such as convergence and divergence determine the spread and synchronization of pacemaking activity. The anatomical basis of divergence, i.e. the degree of axonal arborization of elements within the thalamic circuit, can be functionally modified in a dynamic fashion by biochemical pathways that regulate the properties of synaptic release. These data suggest that it will be possible to therapeutically regulate the thalamus to modify not only the propensity to sleep but also forms of epilepsy that rely on similar thalamic circuitry.