This article addresses the functional significance of the electrophysiological properties of thalamic neurons. We propose that thalamocortical activity, is the product of the intrinsic electrical properties of the thalamocortical (TC) neurons and the connectivity their axons weave. We begin with an overview of the electrophysiological properties of single neurons in different functional states, followed by a review of the phylogeny of the electrical properties of thalamic neurons, in several vertebrate species. The similarity in electrophysiological properties unambiguously indicates that the thalamocortical system must be as ancient as the vertebrate branch itself. We address the view that rather than simply relays, thalamic neurons have sui generis intrinsic electrical properties that govern their specific functional dynamics and regulate natural functional states such as sleep and vigilance. In addition, thalamocortical activity has been shown to be involved in the genesis of several neuropsychiatric conditions collectively described as thalamocortical dysrhythmia syndrome.