Acupuncture has many physiological effects on pain control, instinctual behavior, autonomic nervous system and endocrine system. However, the mechanism of how acupuncture can affect these functions is not well known. The electrophysiological study was done using anesthetized rats to examine the effect of auricular electroacupuncture. 122 neurons of the thalamus and hypothalamus were examined. 20% of the neurons in the thalamus responded either by increasing firing rate or decreasing to auricular electroacupuncture. Some thalamic neurons responded by increasing to the nociceptive stimulation and by decreasing to acupuncture stimulation. These effects might explain some part of the analgesic effect of acupuncture. 14% of the neurons of the hypothalamus, mainly in the dorsomedial hypothalamic nucleus and around the mammillothalamic tract, responded to acupuncture. The neurons in the lateral hypothalamic area and the ventromedial hypothalamic nucleus did not respond. These results suggest the indirect effect on instinctual behavior, especially on feeding behavior, of acupuncture.