Head direction (HD), boundary vector, grid and place cells in the entorhinal-hippocampal system form the brain's navigational system that allows to identify the animal's current location and to move towards desired goal locations. How the functions of these specialized neuron types are acquired and how their computations relate to each other remain to be understood. We examined how head direction and place information are represented in thalamic, post-subiculum and hippocampal neurons and how their firing patterns are influenced by the ambulatory constraints imposed upon the animal by the boundaries of the explored environment. We show that in the antero-dorsal thalamic nucleus, the HD signal can represent a spurious spatial code under behavioral constraints. In the post-subiculum, the main cortical stage of HD signal processing, the amount of spatial information conveyed by HD neurons is increased by the combination of the HD signal with other sensory modalities. We also demonstrate HD signals in the hippocampus and hypothesize that HD can contribute to the generation of a spatial code. These findings demonstrate how sensory information can be transduced into a spatial code.