The thalamus is a critical node for several pathways involved in learning and memory. Damage to the thalamus by trauma, disease or malnourishment can impact the effectiveness of the prefrontal cortex (PFC) and hippocampus (HPC) and lead to a profound amnesia state. Using the pyrithiamine-induced thiamine deficiency (PTD) rat model of human Wernicke-Korsakoff syndrome, we tested the hypothesis that co-infusion of the acetylcholinesterase inhibitor physostigmine across the PFC and HPC would recover spatial alternation performance in PTD rats. When cholinergic tone was increased by dual injections across the PFC-HPC, spontaneous alternation performance in PTD rats was recovered. In addition, we tested a second hypothesis that two ventral midline thalamic nuclei, the rhomboid nucleus and nucleus reuniens (Rh-Re), form a critical node needed for the recovery of function observed when cholinergic tone was increased across the PFC and HPC. By using the GABAA agonist muscimol to temporarily deactivate the Rh-Re the recovery of alternation behavior obtained in the PTD model by cholinergic stimulation across the PFC-HPC was blocked. In control pair-fed (PF) rats, inactivation of the Rh-Re impaired spontaneous alternation. However, when inactivation of the Rh-Re co-occurred with physostigmine infusions across the PFC-HPC, PF rats had normal performance. These results further demonstrate that the Rh-Re is critical in facilitating interactions between the HPC and PFC, but other redundant pathways also exist.