Synaptic connectivity between the prefrontal cortex (PFC) and the mediodorsal thalamic nucleus (MD) of the rat has been investigated with the electron microscope after labeling both the pre- and postsynaptic elements. Prefrontal corticothalamic fibers end exclusively as small axon terminals with round synaptic vesicles (SR boutons), which make asymmetrical synaptic contacts with distal dendritic segments of MD neurons. Thalamocortical terminals from MD in PFC are also of the SR type and form asymmetrical synaptic contacts predominantly with dendritic spines arising from the apical or basal dendrites of pyramidal cells whose somata reside in layers III, V and VI. At least some pyramidal cells in layer III that receive MD afferents are callosal cells, whereas deep layer pyramidal cells projecting to MD receive directly some of the thalamocortical terminations from MD, suggesting that the recurrent loop to MD is monosynaptically mediated. Thus, taken together with recent evidence that both the PFC-MD and MD-PFC pathways are glutamatergic and excitatory, the cortical excitation exerted by afferent fibers from MD is transferred, not only back to MD itself through deep pyramidal cells, but also the contralateral prefrontal cortex via pyramidal cells in layer III of the ipsilateral prefrontal cortex. Concerning modulatory and inhibitory inputs, fibers to MD from the ventral pallidum and substantia nigra pars reticulata have been shown to be inhibitory and GABAergic. In addition, fibers from the ventral tegmental area preferentially make symmetrical membrane thickenings (i.e. inhibitory synapses) on deep pyramidal cells in PFC that receive synaptic endings from MD. From these morphological grounds, therefore, cells in the ventral pallidum, the substantia nigra pars reticulata and the ventral tegmental area may mediate, to some extent, an inhibitory effect on the reverberatory excitation between PFC and MD.