The thalamus has been found to be activated during the early phase of moderate hypoglycemia. Here, we tested the hypothesis that this region is less activated during hypoglycemia in subjects with type 1 diabetes (T1DM) and hypoglycemia unawareness relative to controls. Twelve controls (5 F/7 M, age 40 ± 14 years, body mass index 24.2 ± 2.7 kg/m²) and eleven patients (7 F/4 M, age 39 ± 13 years, body mass index 26.5 ± 4.4 kg/m²) with well-controlled T1DM (A1c 6.8 ± 0.4%) underwent a two-step hyperinsulinemic (2.0 mU/kg per minute) clamp. Cerebral blood flow (CBF) weighted images were acquired using arterial spin labeling to monitor cerebral activation in the midbrain regions. Blood glucose was first held at 95 mg/dL and then allowed to decrease to 50 mg/dL. The CBF image acquisition during euglycemia and hypoglycemia began within a few minutes of when the target blood glucose values were reached. Hypoglycemia unaware T1DM subjects displayed blunting of the physiologic CBF increase that occurs in the thalamus of healthy individuals during the early phase of moderate hypoglycemia. A positive correlation was observed between thalamic response and epinephrine response to hypoglycemia, suggesting that this region may be involved in the coordination of the counter regulatory response to hypoglycemia.