Non-competitive N-methyl- d-aspartate (NMDA) receptor antagonists, ketamine, phencyclidine (PCP) and dizocilpine (MK-801), produce psychosis in people. In rodents they produce cytoplasmic vacuoles in injured retrosplenial cortical neurons that express HSP70 heat shock protein. This study examined possible circuits and receptors that mediate this neuronal injury. Bilateral, but not unilateral, injection of dizocilpine (5, 10, 15, 20 μg/μL per side) into the anterior thalamus induced HSP70 protein in pyramidal neurons in deep layer III of rat retrosplenial cortex 24 h later. In contrast, bilateral dizocilpine injections (5, 10, 15, 20 μg/μL per side) into the retrosplenial cortex or into the diagonal band of Broca did not induce HSP70. Bilateral injections of muscimol (0.1, 1, 10 μg/μL per side), a GABAA (γ-aminobutyric acid) agonist, into the anterior thalamus blocked HSP70 induction in the retrosplenial cortex produced by systemic dizocilpine (1 mg/kg). Bilateral thalamic injections of baclofen (0.1, 1, 10 μg/μL per side), a GABAB agonist, were ineffective. Anterograde tracer studies confirmed that neurons in the anterior thalamus project to superficial layer III of the retrosplenial cortex where the dendrites of HSP70-immunostained neurons in deep layer III reside. Bilateral blockade of NMDA receptors on GABA neurons in the reticular nuclei of the thalamus is proposed to decrease GABA neuronal firing, decrease GABA release and decrease activation of GABAA receptors. This activates thalamic projection neurons that damage retrosplenial cortical neurons presumably via unblocked cortical glutamate α-amino-3-hydroxy-5-methyl-isoxazole-4-propionate (AMPA) and kainate receptors. The increases of blood flow that occur in the thalamus and retrosplenial cortex of people that have psychosis produced by NMDA antagonists could be related to thalamic excitation of the retrosplenial cortex produced by these drugs.