The thalamus is an important hub for sensory information and participates in sensory perception, regulation of attention, arousal and sleep. These functions are executed primarily by glutamatergic thalamocortical neurons that extend axons to the cortex and initiate cortico-thalamocortical connectional loops. However, the thalamus also contains projection GABAergic neurons that do not extend axons toward the cortex. Here, we have harnessed recent insight into the development of the intergeniculate leaflet (IGL) and the ventral lateral geniculate nucleus (LGv) to specifically target and manipulate thalamic projection GABAergic neurons in female and male mice. Our results show that thalamic GABAergic neurons of the IGL and LGv receive retinal input from diverse classes of retinal ganglion cells (RGCs) but not from the M1 intrinsically photosensitive retinal ganglion cell (ipRGC) type. We describe the synergistic role of the photoreceptor melanopsin and the thalamic neurons of the IGL/LGv in circadian entrainment to dim light. We identify a requirement for the thalamic IGL/LGv neurons in the rapid changes in vigilance states associated with circadian light transitions. SIGNIFICANCE STATEMENT The intergeniculate leaflet (IGL) and ventral lateral geniculate nucleus (LGv) are part of the extended circadian system and mediate some nonimage-forming visual functions. Here, we show that each of these structures has a thalamic (dorsal) as well as prethalamic (ventral) developmental origin. We map the retinal input to thalamus-derived cells in the IGL/LGv complex and discover that while RGC input is dominant, this is not likely to originate from M1ipRGCs. We implicate thalamic cells in the IGL/LGv in vigilance state transitions at circadian light changes and in overt behavioral entrainment to dim light, the latter exacerbated by concomitant loss of melanopsin expression.