Based on recent insight into the thalamocortical system and its role in perception and conscious experience, a unified pathophysiological framework for hallucinations in neurological and psychiatric conditions is proposed, which integrates previously unrelated neurobiological and psychological findings. Gamma-frequency rhythms of discharge activity from thalamic and cortical neurons are facilitated by cholinergic arousal and resonate in networks of thalamocortical circuits, thereby transiently forming assemblies of coherent gamma oscillations under constraints of afferent sensory input and prefrontal attentional mechanisms. If perception is based on synchronisation of intrinsic gamma activity in the thalamocortical system, then sensory input to specific thalamic nuclei may merely play a constraining role. Hallucinations can be regarded as underconstrained perceptions that arise when the impact of sensory input on activation of thalamocortical circuits and synchronisation of thalamocortical gamma activity is reduced. In conditions that are accompanied by hallucinations, factors such as cortical hyperexcitability, cortical attentional mechanisms, hyperarousal, increased noise in specific thalamic nuclei, and random sensory input to specific thalamic nuclei may, to a varying degree, contribute to underconstrained activation of thalamocortical circuits. The reticular thalamic nucleus plays an important role in suppressing random activity of relay cells in specific thalamic nuclei, and its dysfunction may be implicated in the biological vulnerability to hallucinations in schizophrenia. Combined with general activation during cholinergic arousal, this leads to excessive disinhibition in specific thalamic nuclei, which may allow cortical attentional mechanisms to recruit thalamic relay cells into resonant assemblies of gamma oscillations, regardless of their actual sensory input, thereby producing an underconstrained perceptual experience.

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Cholinergic arousal mechanisms predispose thalamic and cortical neurons to fire action potentials at gamma rhythms, which have a tendency to resonate in thalamocortical networks, thereby forming coherent assemblies under constraints of sensory input to specific thalamic nuclei, on the one hand, and prefrontal and limbic attentional mechanisms, on the other. Perception may be based on sustained assemblies of coherent gamma oscillations in thalamocortical circuits. In schizophrenia, the impact of sensory input on self-organization of thalamocortical activity may be generally reduced. As a result, processes underlying perception can become uncoupled from sensory input, particularly at times of hyperarousal, leading to domination of attentional mechanisms and the emergence of hallucinations. Evidence is reviewed that implicates excessive neuronal noise in specific thalamic nuclei in the generation of hallucinations in schizophrenia. Nicotinic receptor abnormalities, dopaminergic hyperactivity and glutamate-receptor hypofunction are reconciled within a model of psychotic symptom generation that places crucial emphasis on dysfunction of the reticular thalamic nucleus.

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If an instance of conscious experience of the seemingly objective world around us could be regarded as a newly formed event memory, much as an instance of mental imagery has the content of a retrieved event memory, and if, therefore, the stream of conscious experience could be seen as evidence for ongoing formation of event memories that are linked into episodic memory sequences, then unitary conscious experience could be defined as a symbolic representation of the pattern of hippocampal neuronal firing that encodes an event memory – a theoretical stance that may shed light into the mind-body and binding problems in consciousness research. Exceedingly detailed symbols that describe patterns of activity rapidly self-organizing, at each cycle of the θ rhythm, in the hippocampus are instances of unitary conscious experience that jointly constitute the stream of consciousness. Integrating object information (derived from the ventral visual stream and orbitofrontal cortex) with contextual emotional information (from the anterior insula) and spatial environmental information (from the dorsal visual stream), the hippocampus rapidly forms event codes that have the informational content of objects embedded in an emotional and spatiotemporally extending context. Event codes, formed in the CA3-dentate network for the purpose of their memorization, are not only contextualized but also allocentric representations, similarly to conscious experiences of events and objects situated in a seemingly objective and observer-independent framework of phenomenal space and time. Conscious perception, creating the spatially and temporally extending world that we perceive around us, is likely to be evolutionarily related to more fleeting and seemingly internal forms of conscious experience, such as autobiographical memory recall, mental imagery, including goal anticipation, and to other forms of externalized conscious experience, namely dreaming and hallucinations; and evidence pointing to an important contribution of the hippocampus to these conscious phenomena will be reviewed.

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