The anatomical connections from the whiskers to the rodent somatosensory (barrel) cortex form two parallel (lemniscal and paralemniscal) pathways. It is unclear whether the paralemniscal pathway is directly involved in tactile processing, because paralemniscal neuronal responses show poor spatial resolution, labile latencies and strong dependence on cortical feedback. Here we show that the paralemniscal system can transform temporally encoded vibrissal information into a rate code. We recorded the representations of the frequency of whisker movement along the two pathways in anaesthetized rats. In response to varying stimulus frequencies, the lemniscal neurons exhibited amplitude modulations and constant latencies. In contrast, paralemniscal neurons in both thalamus and cortex coded the input frequency as changes in latency. Because the onset latencies increased and the offset latencies remained constant, the latency increments were translated into a rate code: increasing onset latencies led to lower spike counts. A thalamocortical loop that includes cortical oscillations and thalamic gating can account for these results. Thus, variable latencies and effective cortical feedback in the paralemniscal system can serve the processing of temporal sensory cues, such as those that encode object location during whisking. In contrast, fixed time locking in the lemniscal system is crucial for reliable spatial processing.