Abstract Interactions between the cortex and thalamus are essential for sensation, action and cognition. Although the role of the thalamus in sensory processing is well-studied, its role in cognition is just beginning to be elucidated. This proposal will focus on the mediodorsal thalamus (MD), one of the largest thalamic nuclei of the mammalian brain, in regulating prefrontal cortex (PFC) activity in cognitive control and flexibility. MD-PFC interactions are known to be perturbed in schizophrenia, but therapeutic options are limited because the circuit mechanisms underlying these interactions are unknown. In this proposal, we will test an overarching model that the MD regulates PFC connectivity patterns to match the behavioral context through enhancement of context-relevant activity patterns and suppression of context-irrelevant ones. Specifically, our model posits that MD neurons generate context-specific signals by selectively strengthening PFC inputs that carry the basic elements of these signals but do not encode the context explicitly. Two MD cell types appear to generate such signals, one of which uses it to enhance context-congruent PFC activity while the other suppresses context incongruent activity. Lastly, our model posits that these distinct thalamic effects are mediated by different PFC circuit motifs, an excitatory/disinhibitory and an inhibitory, respectively. In Aim I, we will test the hypothesis that MD neurons generate context-specific output based on context non-specific inputs from PFC. In Aim II, we will test the hypothesis that the two MD functional cell types map onto distinct genetic types. In Aim III, we will test the hypothesis that the two MD-dependent effects on PFC, enhancement and suppression of activity patterns, are implemented by distinct local circuit motifs. Overall, our work should clarify the circuit mechanisms by which the MD influences PFC activity, providing a starting point for examining their generality across different task switching paradigms as well as relationship to higher order thalamus function more broadly. Our work should also be relevant to central mission of the NIH in understanding mechanisms with therapeutic potential.