SummaryThe thalamus is a key brain structure engaged in attentional functions, such as selectively amplifying task-relevant signals of one sensory modality while filtering distractors of another. To investigate computational mechanisms of attentional modulation, we developed a biophysically grounded thalamic reticular circuit model, comprising excitatory thalamocortical and inhibitory reticular neurons, which captures characteristic neurophysiological observations from the alert behaving animals. Top-down attentional control inputs onto reticular neurons effectively modulate thalamic gain and enhance downstream readout, to improve performance across detection, discrimination, and cross-modal task paradigms. Heterogeneity of thalamic responses plays an essential role in downstream decoding during attentional modulation. Dynamical systems analysis explains why reticular neurons are an especially potent site for top-down control, as implicated by experiments. Perturbation analysis reveals excitation-inhibition ratio as an effective parameter governing thalamic processing. These findings establish experimentally testable circuit mechanisms for attentional control in thalamus, with implications for distributed neural control of cognitive processing.