Computational modeling and human studies suggest that transcranial alternating current stimulation (tACS) modulates alpha oscillations by entrainment. Yet, a direct examination of how tACS interacts with neuronal spiking activity that gives rise to the alpha oscillation in the thalamo-cortical system has been lacking. Here, we demonstrate how tACS entrains endogenous alpha oscillations in head-fixed awake ferrets. We first show that endogenous alpha oscillations in the posterior parietal cortex drive the primary visual cortex and the higher-order visual thalamus. Spike-field coherence is largest for the alpha frequency band, and presumed fast-spiking inhibitory interneurons exhibit strongest coupling to this oscillation. We then apply alpha-tACS that results in a field strength comparable to what is commonly used in humans (<0.5 mV/mm). Both in these ferret experiments and in a computational model of the thalamo-cortical system, tACS entrains alpha oscillations by following the theoretically predicted Arnold tongue. Intriguingly, the fast-spiking inhibitory interneurons exhibit a stronger entrainment response to tACS in both the ferret experiments and the computational model, likely due to their stronger endogenous coupling to the alpha oscillation. Our findings demonstrate the in vivo mechanism of action for the modulation of the alpha oscillation by tACS.