We hypothesize that REM sleep serves to upregulate and/or prevent downregulation of brain norepinephrine (NE) receptors. This hypothesis is based on the following observations: (1) NE neurons of the locus coeruleus (LC) are tonically active in waking and non-REM sleep, but the entire population of LC NE neurons is inactive during REM sleep. (2) Continuous presence of NE or adrenoceptor agonists downregulates NE receptors, while a reduction in NE availability upregulates these receptors. (3) The effects of REM sleep deprivation are similar to those of NE receptor downregulation. Recent biochemical studies of NE receptor sensitivity provide strong experimental support for this hypothesis. The functional consequence of enhanced NE receptor 'tone' brought about by REM sleep would be improved signal processing in diverse brain systems, thus endowing the organism with a selective advantage. This hypothesis makes a number of specific predictions which can be tested with currently available techniques, and suggests new ways of understanding the evolution and postnatal development of REM sleep.