AbstractNeurosteroids are potent allosteric modulators of GABAA receptors (GABAARs). Although the effects of exogenous neurosteroids on GABAAR function are well documented, less is known about effects of neurosteroids produced by local endogenous biosynthesis. The neurosteroidogenic enzymes 5α‐reductase and 3α‐hydroxysteroid dehydrogenase are expressed in two nuclei of somatosensory thalamus, the thalamic reticular nucleus (nRT) and ventrobasal nucleus (VB). Here, the effects of acute blockade of neurosteroidogenesis by the 5α‐reductase inhibitor finasteride on phasic and tonic GABAAR‐mediated currents were examined in nRT and VB of mice. In nRT, finasteride altered the decay and amplitude, but not the frequency, of phasic currents, with no effect on tonic inhibition. In VB neurons, by contrast, finasteride reduced both the size and frequency of phasic currents, and also reduced the degree of tonic inhibition. These studies thus provide novel evidence for endogenous modulation of GABAAR function by 5α‐reduced neurosteroids in the mature thalamus.