The caudate nucleus and putamen is part of a subcortical region called striatum. Striatum together with globus pallidus is collectively called the basal ganglia. It serves as a central relay between the brainstem and cerebral cortex which plays an important role in motor functions and spatial information and therefore being important in Parkinson's disease. The caudate also contributes to body posture and fine tuning of movements, such as speed and direction. The input that comes to the caudate is then processed and sent to the thalmus.

Important structures in the caudate nucleus are the ependymal layer and the choroid plexus, these structures produce and regulate the cerebrospinal fluid. The ependymal cells in the ependymal layer are a specialized type of glial cells, however, they share similarities with regular mucus producing cells.

The caudate nucleus consists of gray matter and white matter bundles: Gray matter is unmyelinated axons, dendrites, neuronal cell bodies and glial cells. White matter bundles have myelinated axons and responsible for transporting signals between different regions of the brain.