Aberrant function of pacemaker currents (Ih), carried by hyperpolarization-activated cation non-selective (HCN) channels, affects neuronal excitability and accompanies epilepsy, but its distinct roles in epileptogenesis and chronic epilepsy are unclear. We probed Ih function and subunit composition during both pre- and chronically epileptic stages in thalamocortical (TC) neurones of the Genetic Absence Epilepsy Rat from Strasbourg (GAERS). Voltage gating of Ih was unaltered in mature somatosensory TC cells, both in vivo and in vitro. However, the enhancement of Ih by phasic, near-physiological, cAMP pulses was diminished by ∼40% and the half-maximal cAMP concentration increased by ∼5-fold. This decreased responsiveness of Ih to its major cellular modulator preceded epilepsy onset in GAERS, persisted throughout the chronic state, and was accompanied by an enhanced expression of the cAMP-insensitive HCN1 channel mRNA (> 50%), without changes in the mRNA levels of HCN2 and HCN4. To assess for alterations in TC cell excitability, we monitored the slow up-regulation of Ih that is induced by Ca2+-triggered cAMP synthesis and important for terminating in vitro synchronized oscillations. Remarkably, repetitive rebound Ca2+ spikes evoked normal slow Ih up-regulation in mature GAERS neurones; that sufficed to attenuate spontaneous rhythmic burst discharges. These adaptive mechanisms occurred upstream of cAMP turnover and involved enhanced intracellular Ca2+ accumulation upon repetitive low-threshold Ca2+ discharges. Therefore, HCN channels appear to play a dual role in epilepsy. Weakened cAMP binding to HCN channels precedes, and likely promotes, epileptogenesis in GAERS, whereas compensatory mechanisms stabilizing Ih function contribute to the termination of spike-and-wave discharges in chronic epilepsy.