The nucleus reuniens and rhomboid nuclei of the thalamus (ReRh) are reciprocally connected to a range of higher order cortices including hippocampus (HPC) and medial prefrontal cortex (mPFC). The physiological function of ReRh is well predicted by requirement for interactions between mPFC and HPC, including associative recognition memory, spatial navigation and working memory. Although anatomical and electrophysiological evidence suggests ReRh makes excitatory synapses in mPFC there is little data on the physiological properties of these projections, or whether ReRh and HPC target overlapping cell populations and, if so, how they interact. We demonstrate in ex vivo mPFC slices that ReRh and HPC afferent inputs converge onto more than two-thirds of layer 5 pyramidal neurons, show that ReRh, but not HPC, undergoes marked short-term plasticity during theta frequency transmission, and that HPC, but not ReRh, afferents are subject to neuromodulation by acetylcholine acting via muscarinic receptor M2. Finally, we demonstrate that pairing HPC followed by ReRh (but not pairing ReRh followed by HPC) at theta frequency induces associative, NMDA receptor dependent synaptic plasticity in both inputs to mPFC. These data provide vital physiological phenotypes of the synapses of this circuit and provide a novel mechanism for HPC-ReRh-mPFC encoding.