The pen-tailed tree-shrew (Ptilocercus lowii) has been regarded by Le Gros Clark (1926), and Martin (1968) to possess more primitive morphological and to a certain extent, neuro-anatomical characteristics than the other tree-shrew species belonging to the sub-family Tupaiinae. Investigations have been carried out on the diencephalon of Ptilocercus lowii which has not been completely done by Le Gros Clark and other workers since 1926, to find out whether the diencephalon has actually undegone any phylogenetic changes that should be more advanced than those of the Insectivora or remain more primitive than that of the Tupaiinae. The diencephalic structure that show the most significant phylogenetic features which differe Ptilocerecus from Tupaia are observed in the anterior, dorsolateral and ventrolateral thalamic groups, and the geniculate bodies. The nucleus anteroventralis is, by comparison, much smaller and poorly differentiated from the nucleus anteromedialis. The nucleus anterodorsalis is also comparably large and does not reach the dorsal surface of the thalamus as it does in the primates. The midline nuclei do not show any significant differences, except the notably larger size of nucleus parataenialis in Ptilocercus. The nucleus mediodoralis is small and indifferentiated although it does show some incipient signs of cellular differentiation. The nucleus centralis lateralis is well developed; its inferior (ventral) part is larger than its superior part which is the better developed of the two parts in the tupaiids and primates. The nucleus centrum medianum appears to be very small and forms only a lateral extension of the nucleus parafascicularis. The ventrolateral thalamic group basically consists of nuclei ventrales anterior, lateralis and posterior without intermediate or transitional zones as found in Tupaia and Primates. The nucleus pretectalis is the largest and the best developed of all the elements of the posterior thalamic nuclear group. The lateral geniculate nucleus is not differentiated into laminae like that in Tupaia and Primates; it is merely a homogeneous structure that appears to be smaller in size that the pregeniculate and medial geniculate nuclei. The medial geniculate nucleus is large in proportional size of the whole thalamus and appears to be well differentiated cellularly into several small parts. No remarkable changes are noted in the epithalamus, subthalamus and hypothalamus. However, the nucleus ventromedialis appears to be the most outstanding structure in the infundibular region of the hypothalamus. The mammillary region is of a simpler construction in Ptilocercus than in Tupaia; it does not protrude from the ventral surface of the hypothalamus. In the light of these findings, the phyletic status of Ptilocercus in the family Tupaiidae is discussed.