Current models of basal ganglia disorders suggest that choreoathetosis is the end result of reduced GABAergic inhibition of the motor thalamus. Graft-derived release of GABA from intrastriatal striatal grafts has also been reported. In the present work, cell suspension grafts from embryonic day 14-15 rat striatal primordia were implanted close to the ventromedial thalamic nucleus to investigate whether they can develop and survive in this ectopic location, and whether they induce changes in the circling behaviour of the host. The grafts were implanted either in normal rats or in rats whose striatum had been lesioned with ibotenic acid. These grafts were implanted either ipsilateral or contralateral to the lesioned striatum. Additionally, some rats received intrastriatal grafts, and lesioned but non-grafted rats and lesioned rats that had received injections of saline or of cell suspensions from fetal spinal cord in the thalamus were used as control. Four to eight months after transplantation, circling behaviour after amphetamine or apomorphine injection was evaluated. Serial sections were stained with Cresyl Violet and studied immunohistochemically with antibodies against DARPP-32 (dopamine- and adenosine 3',5'-monophosphate-regulated phosphoprotein, as striatal marker), Fos protein, glutamate decarboxylase (67,000 mol. wt), glutamate decarboxylase (65,000 mol. wt) and GABA. Cresyl Violet sections showed that the intrathalamic striatal grafts developed into tissue masses resembling those observed in intrastriatal striatal grafts. DARPP-32 immunohistochemistry revealed that the grafts were composed of DARPP-32 immunoreactive (striatum-like) and DARPP-32-negative patches. The intrathalamic grafts of rats which had received a low dose of apomorphine (0.25 mg/kg) 2 h before perfusion showed clusters of intensely Fos-immunoreactive nuclei throughout the transplant, indicating that these cells had developed dopamine receptors and supersensitivity to dopamine agonists. Double Fos and DARPP-32 immunohistochemistry revealed that the Fos-positive nuclei were located in the striatum-like areas. Finally, the intrathalamic grafts also contained neurons immunoreactive to GABA and glutamate decarboxylase (65,000 and 67,000 mol. wt). Rats that had received intrathalamic grafts contralateral to the lesioned striatum (i.e. contralateral to the lesion-induced turning direction) showed a significant reduction of circling both after amphetamine (78% reduction) or apomorphine (77% reduction) injection. Rats that had received grafts ipsilateral to the lesioned striatum showed a 75% decrease in amphetamine-induced circling, but no significant change in apomorphine-induced circling. No significant drug-induced circling was observed in non-lesioned and grafted rats. Sham grafting (saline) or grafting of weakly GABAergic tissue (fetal spinal cord) had no significant effects on lesion-induced circling behaviour.(ABSTRACT TRUNCATED AT 400 WORDS)