This chapter deals with the structure and function of the visual thalamus (lateral geniculate nucleus, LGN) and the primary visual cortex and aims to put this system into a computational perspective. We start with an overview of the basic structures of the primary visual pathway and the terminology used. Next, the organization of the LGN and its main functions are described: receptive field structure of LGN cells, excitatory and inhibitory influences, contrast gain-control, spatial summation, temporal structure of activity and influence of extra-retinal inputs. The section closes with models on three functional aspects of the LGN: 1) Switching between burst firing and tonic transmission modes of LGN cells, 2) Control of LGN function during the sleep-wake cycle, and 3) Involvement of LGN in gating visual signals. The section on the visual cortex starts with details of its morphological organisation: cortical layers, cell types, columnar structure and horizontal connections. This is followed by a description of the basic response characteristics of neurons, the organisation of receptive fields and their dynamic behavior. Here, mechanisms of establishing cortical orientation selectivity are considered in detail. Next, we focus on functional maps, e.g. distribution of orientation preferences of cells. The chapter closes with a section on basic models of the primary visual cortex, concerning: 1) Temporal firing patterns of neuronal assemblies, i.e. oscillations and synchronization, 2) Cortical cell characteristics, e.g. orientation specificity, and 3) Formation of functional maps, e.g. orientation map. J. L. van Hemmen et al. (eds.), Models of Neural Networks IV