Interactions between the thalamus and prefrontal cortex (PFC) play a critical role in cognitive function and arousal. Here, we use anatomical tracing, electrophysiology, optogenetics, and 2-photon Ca2+ imaging to determine how ventromedial (VM) and mediodorsal (MD) thalamus target specific cell types and subcellular compartments in layer 1 (L1) of mouse PFC. We find thalamic inputs make distinct connections in L1, where VM engages neuron-derived neurotrophic factor (NDNF+) cells in L1a and MD drives vasoactive intestinal peptide (VIP+) cells in L1b. These separate populations of L1 interneurons participate in different inhibitory networks in superficial layers by targeting either parvalbumin (PV+) or somatostatin (SOM+) interneurons. NDNF+ cells also inhibit the apical dendrites of L5 pyramidal tract (PT) cells to suppress action potential (AP)-evoked Ca2+ signals. Lastly, 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.