Interactions between the thalamus and prefrontal cortex (PFC) play a critical role in cognitive function and arousal and are disrupted in neuropsychiatric disorders. The PFC is reciprocally connected with ventromedial (VM) and mediodorsal (MD) thalamus, both higher-order nuclei with distinct properties to the classically studied sensory relay nuclei. To understand the properties of the circuits linking PFC and thalamus we use anatomical tracing, electrophysiology, optogenetics, and 2‐photon Ca2+ imaging, determining how VM and MD target specific cell types and subcellular compartments of mouse PFC. Focusing on cortical layer 1, we find thalamic nuclei target distinct sublayers, with VM engaging NDNF+ cells in L1a, and MD driving VIP+ cells in L1b. These separate populations of L1 interneurons participate in different inhibitory networks in superficial layers by targeting either PV+ or SOM+ interneurons. NDNF+ cells mediate a unique form of thalamus-evoked inhibition at PT cells, selectively blocking VM-evoked dendritic Ca2+ spikes. Together, our findings reveal how two thalamic nuclei differentially communicate with the PFC through distinct L1 micro‐circuits and how inhibition is critical for controlling PFC output back to thalamus.