Multiunit recordings were made in the ventroposterior lateral nucleus of the thalamus in anesthetized raccoons. During recording from cells responding to cutaneous stimulation of a forepaw digit, the corresponding digit was denervated permanently (by cutting its four digital nerves) or temporarily (by injecting lidocaine into the base of the digit). Both procedures resulted in immediate increases in the inhibition that could be induced by stimulation of the adjacent digits when the original cutaneous receptive field was on the glabrous skin. In each case with temporary denervation, this enhanced off-focus inhibition decreased when the excitatory responses returned to normal. In contrast, temporary denervation of the digit during recording at sites in the hairy skin representation did not reveal this increased inhibition from adjacent digits. When capsaicin was applied to the digital nerves in two animals, the excitatory receptive fields of thalamic neurons increased in area, but were still restricted to the same part of the digit. These data indicate that the immediate unmasking of inhibitory responses, previously reported in primary somatosensory cortex of the raccoon, is also present in the thalamus. The capsaicin-induced expansion of excitatory receptive fields confirms previous experiments in other species, and suggests that C fibers play a role in modulating the size of cutaneous receptive fields. However, the enlargement of excitatory receptive fields by capsaicin is much less than the unmasking of inhibitory fields induced by digit denervation, and indicates that different mechanisms are involved in controlling these various inputs to thalamic neurons.