Inhibitory circuits in thalamus and cortex shape the major activity patterns observed by electroencephalogram (EEG) in the adult brain. Their delayed maturation and circuit integration, relative to excitatory neurons, suggest inhibitory neuronal development could be responsible for the onset of mature thalamocortical activity. Indeed, the immature brain lacks many inhibition-dependent activity patterns, such as slow-waves, delta oscillations and sleep-spindles, and instead expresses other unique oscillatory activities in multiple species including humans. Thalamus contributes significantly to the generation of these early oscillations. Compared to the abundance of studies on the development of inhibition in cortex, however, the maturation of thalamic inhibition is poorly understood. Here we review developmental changes in the neuronal and circuit properties of the thalamic relay and its interconnected inhibitory thalamic reticular nucleus (TRN) both in vitro and in vivo, and discuss their potential contribution to early network activity and its maturation. While much is unknown, we argue that weak inhibitory function in the developing thalamus allows for amplification of thalamocortical activity that supports the generation of early oscillations. The available evidence suggests that the developmental acquisition of critical thalamic oscillations such as slow-waves and sleep-spindles is driven by maturation of the TRN. Further studies to elucidate thalamic GABAergic circuit formation in relation to thalamocortical network function would help us better understand normal as well as pathological brain development.