Kainate receptors have been studied extensively in vitro, but how they might function physiologically remains unclear. We studied kainate receptor modulation of synaptic responses in the rat ventrobasal thalamus using the novel antagonist LY382884 and the agonist ATPA (selective for GluR5-containing kainate receptors) as tools. No evidence could be found for a direct contribution of kainate receptors to responses of thalamic relay cells to lemniscal (sensory) input in thalamic slices studied with the aid of intracellular and field potential recordings, using selective AMPA and NMDA receptor antagonists and LY382884. However, the GluR5 agonist ATPA reduced the IPSPs originating from the thalamic reticular nucleus. Extracellular single-neurone recordings in anaesthetised rats showed that excitatory responses evoked by physiological vibrissa afferent stimulation were reduced by LY382884 applied iontophoretically at the recording site. This action of the antagonist was occluded when GABA receptors were blocked, indicating that the reduction in excitatory sensory responses by LY382884 is due to an action on GABAergic inhibition arising from the thalamic reticular nucleus. Further experiments showed that these actions depended on whether inhibition was evoked during activation of the excitatory receptive field rather than when inhibition was evoked from a surround vibrissa. We suggest that GluR5 is located presynaptically on inhibitory GABAergic terminals of thalamic reticular nucleus neurones, and that it is normally activated by glutamate spillover from synapses between excitatory afferents and relay neurones during physiological stimulation. We propose that this GluR5-activated disinhibition has an important novel role in extracting sensory information from background noise.