To investigate how auditory cortex responds to thalamic inputs, we have used electrophysiological and anatomical techniques to characterize a brain slice containing functionally linked thalamocortical and intracortical pathways. In extracellular recordings, stimulation of thalamic afferents elicited a short-latency field potential and current sink in layer IV of the cortex, followed by 100-500 ms of polysynaptic activity containing rapid (gamma-band, 20-80 Hz) fluctuations. Paired intracellular and extracellular recordings showed that a short-latency excitatory postsynaptic potential (EPSP) corresponded to the fast extracellular potential, and that a slow intracellular depolarization with superimposed rapid fluctuations corresponded to the polysynaptic extracellular activity. Pharmacological manipulations demonstrated that glutamate receptors contributed to mono- and polysynaptic activity, and that the gamma-band fluctuations contained intermixed rapid depolarizations and Cl--mediated inhibition. The spread of evoked activity through auditory cortex was determined by extracellular mapping away from the excitatory focus (the site of the largest amplitude fast response). The short-latency potential traversed auditory cortex at 1.25 m/s and decreased over 1-2 mm, likely reflecting sequential activation of cells contacted by thalamocortical arbors. In contrast, polysynaptic activity did not decrease but propagated as a spatially restricted wave at a 57-fold slower velocity (0.022 m/s). Thus, stimulation of the auditory thalamocortical pathway in vitro elicited a fast glutamatergic potential in layer IV, followed by polysynaptic activity, including gamma-band fluctuations, that propagated through the cortex. Propagating activity may form transient neural assemblies that contribute to auditory information processing.