Prepulse inhibition (PPI) of startle is impaired in schizophrenics, which suggests they have disturbances in circuitry that controls PPI. How activity in forebrain circuitry is communicated to the primary startle circuit to modulate PPI was explored. Subpallidal cells innervate the pedunculopontine tegmental nucleus (PPTg). Infusion of the gamma-aminobutyric acid antagonist picrotoxin into the subpallidum impaired PPI. In other rats, electrolytic PPTg lesions decreased or eliminated PPI, potentiated startle amplitude, and did not alter habituation. The disruption of PPI correlated significantly with the extent of PPTg damage. PPTg lesions reduced PPI when startle stimuli were weak or intense (104 or 120 dB) and when prepulse stimuli ranged from 2 to 17 dB above background but were most profound with prepulses 5-8 dB above background. The PPTg modulates sensorimotor gating and may process and transmit information from forebrain structures to the primary startle circuit.