The neuropeptide, neurotensin (NT), inhibits UP state generation in the cerebral cortex and temporally restricts the response to thalamic input, likely by a generalized increase in inhibition. To investigate the cellular and circuit substrate(s) for how a neuropeptide can shift the balance between cortical excitation and inhibition, we performed whole-cell recordings on slice preparations from mice expressing enhanced green fluorescent protein under control of the promoter for the homeobox gene, lhx6 (lhx6-EGFP mice). These mice identify the 2 largest classes of cortical interneurons; FS and low-threshold-spiking inhibitory neurons. In the presence of NT, both types of lhx6-EGFP neurons were excited through a direct, Na+-dependent depolarization, and through an increase in synaptic excitation. Paired recordings identified cortical white matter (WM) neurons as a source of this excitatory input, which was strengthened in the presence of NT. NT-driven increased synaptic input caused a functional decorrelation of gap junction transmission between lhx6-EGFP neuron pairs. Finally, the synaptic transmission between pyramidal cells and lhx6-EGFP neurons was modulated by addition of NT in favor of stronger inhibition and weaker excitation. These findings demonstrate the existence and functional consequences of an intracortical WM neuron projection, and suggest mechanisms underlying NT-induced promotion of wakefulness.