Although the molecular effects of many anaesthetics have been well characterized, a network-level explanation for how these changes lead to loss of consciousness remains unclear. Studies using electroencephalography have characterized changes in neural oscillations in the cortex at specific frequency bands during propofol-induced anaesthesia and modelling work suggests these changes result from changes in thalamocortical functional connectivity. However, it is unclear if the neurophysiological changes seen at the cortex are due to enhanced or disrupted thalamocortical communication. Direct recordings from these sites during anaesthesia that could be used to confirm such models are rare. We recorded local field potentials from the ventral intermediate nucleus of the thalamus and electrocorticography signals from the ipsilateral sensorimotor cortex in 10 patients undergoing deep brain stimulation surgery. Signals were acquired during induction of propofol anaesthesia while subjects were resting. After confirming direct structural connectivity between the thalamus and the cortical recording site, we investigated propofol-associated changes in thalamic and cortical local power as well as thalamocortical functional connectivity, as measured with coherence, debiased weighted phase lag index, and phase amplitude coupling. Propofol anaesthesia resulted in local power increases at α frequencies (8-12 Hz) across both thalamic and cortical areas. At sensorimotor cortices, there was a broadband power increase (12-100 Hz), while the power of this same broad frequency band was suppressed within the thalamus. Despite the increase in local α power both within the thalamus and cortex, thalamocortical coherence and debiased weighted phase lag index in the α/low β frequencies (8-16 Hz, which was present in the awake state) significantly decreased with propofol administration (P < 0.05, two group test of coherence). Likewise, propofol administration resulted in decreased phase amplitude coupling between the phase of α/low β in the thalamus and the amplitude of broadband gamma (50-200 Hz) in the cortex (P = 0.031, Wilcoxon signed-rank test). We also report phase amplitude coupling between the phase of slow wave oscillations (0.1-1 Hz) and amplitude of broadband frequencies (8-200 Hz) within the cortex and across thalamocortical connections, during anaesthesia, both following a peak-max pattern. While confirming α-power increases with propofol administration both in thalamus and cortex, we observed decreased thalamocortical connectivity, contradicting models that suggest increasing cortical low frequency power is necessarily related to increased thalamocortical coherence but in support of the theory that propofol-induced loss of consciousness is associated with disrupted thalamocortical communication.