Cholinergic regulation of sleep and wakefulness was studied in freely moving rats locally infused with various doses of carbachol into the pontine reticular formation. Induction of REM sleep occurred when carbachol was infused specifically into the posterior oral pontine reticular nucleus (PnO). This effect was observed with 1-10 ng of carbachol, and lasted for at least 6 h. It was antagonized by atropine (100-200 ng) infused into the same site 15 min before carbachol (10 ng), indicating that REM sleep induction resulted from the stimulation of pontine muscarinic receptors. High doses of carbachol (500 ng) did not affect REM sleep but enhanced wakefulness. Cholinergic mechanisms within the PnO may play a critical role in the regulation of REM sleep in the rat.