The thalamus is the main relay station for sensory information reaching the cerebral cortex. It is a paired structure deep in the forebrain that routes and helps process signals before they reach many cortical areas.
Most sensory systems, including touch, pain and vision, send information through thalamic nuclei. The major exception is olfaction: smell information reaches primary olfactory areas without first making the usual thalamic relay. The thalamus also participates in movement circuits, attention, arousal and consciousness.
It is misleading to picture the thalamus as a passive switchboard. Its nuclei filter and modify incoming signals, and their activity changes with sleep, wakefulness and attention. Different nuclei connect with different cortical regions and have distinct functions.
The thalamus sits above the brainstem and forms much of the lateral wall of the third ventricle. Its close neighbor, the hypothalamus, is more directly involved in endocrine and homeostatic regulation.