The parafascicular nucleus (Pf) receives cholinergic input from the pedunculopontine nucleus, part of the reticular activating system involved in waking and rapid eye movement (REM) sleep, and sends projections to the cortex. We tested the hypothesis that Pf neurons fire maximally at gamma band frequency (30–90 Hz), that this mechanism involves high-threshold voltage-dependent P/Q- and N-type calcium channels, and that this activity is enhanced by the cholinergic agonist carbachol (CAR). Patch-clamped 9- to 25-day-old rat Pf neurons ( n = 299) manifested a firing frequency plateau at gamma band when maximally activated (31.5 ± 1.5 Hz) and showed gamma oscillations when voltage-clamped at holding potentials above −20 mV, and the frequency of the oscillations increased significantly with age (24.6 ± 3.8 vs. 51.6 ± 4.4 Hz, P < 0.001) but plateaued at gamma frequencies. Cells exposed to CAR showed significantly higher frequencies early in development compared with those without CAR (24.6 ± 3.8 vs. 41.7 ± 4.3 Hz, P < 0.001) but plateaued with age. The P/Q-type calcium channel blocker ω-agatoxin-IVA (ω-Aga) blocked gamma oscillations, whereas the N-type blocker ω-conotoxin-GVIA (ω-CgTx) only partially decreased the power spectrum amplitude of gamma oscillations. The blocking effect of ω-Aga on P/Q-type currents and ω-CgTx on N-type currents was consistent over age. We conclude that P/Q- and N-type calcium channels appear to mediate Pf gamma oscillations during development. We hypothesize that the cholinergic input to the Pf could activate these cells to oscillate at gamma frequency, and perhaps relay these rhythms to cortical areas, thus providing a stable high-frequency state for “nonspecific” thalamocortical processing.