Sleep is posited to be a fundamental property of groups of highly interconnected neurons and regulated in part by activity-dependent sleep regulatory substances such as tumor necrosis factor alpha (TNFalpha). We show that the unilateral local application of TNFalpha onto the somatosensory cortex of rats induced state- and frequency-dependent EEG asymmetries. In contrast, the unilateral injection of a TNFalpha inhibitor, a TNFalpha soluble receptor, attenuated sleep deprivation-enhanced EEG slow wave power ipsilaterally during non-rapid eye movement sleep (NREMS) but not during REMS or waking. Results are consistent with the notion that sleep begins with state changes occurring within small groups of highly interconnected neurons and is driven in part by the local production of sleep regulating substances.