Position of Diencephalon ◆ Position: Lies between midbrain cerebrum. almost surrounded entirely by cerebral hemisphere Medially: -3rd ventricle between left and right thalamus Diencephalon Laterally: Internal capsule Function -complicated importantPosition of Diencephalon  Position: Lies between midbrain & cerebrum,almost surrounded entirely by cerebral hemisphere  Medially: -3rd ventricle between left and right thalamus  Laterally:Internal capsule  Function – complicated & important Diencephalon