As originally named for the ostensibly contradictory appearance of rapid eye movements and low voltage fast cortical activity during behavioral sleep, paradoxical sleep or rapid eye movement sleep, represents a distinct third state, in addition to waking and slow wave sleep, in mammals and birds. It is an internally generated state of intense tonic and phasic central activation that is contemporaneous with the inhibition of sensory input and motor output. In early studies, it was established that the state of paradoxical sleep was generated within the brainstem, and particularly within the pons. Pharmacological studies indicated an important role for acetylcholine as a neurotransmitter in the generation of this state. Local injections of cholinergic agonists into the pontine tegmentum triggered a state of paradoxical sleep marked by phasic ponto-geniculo-occipital spikes in association with cortical activation and neck muscle atonia. Following the immunohistochemical identification of choline acetyl transferase-containing neurons and their localization to the dorsolateral ponto-mesencephalic tegmentum, neurotoxic lesions of this major cholinergic cell group could be performed to assess its importance in paradoxical sleep. Destruction of the majority of the cholinergic cells, which are concentrated within the laterodorsal tegmental and pedunculopontine tegmental nuclei but extend also into the locus coeruleus and parabrachial nuclei in the cat, resulted in a loss or diminishment of the state of paradoxical sleep, ponto-geniculo-occipital spiking and neck muscle atonia. These deficits were correlated with the loss of choline acetyltransferase-immunoreactive neurons in the region, so as to corroborate results of pharmacological studies and single unit recording studies indicating an active role of these cholinergic cells in the generation of paradoxical sleep and its components. These cells provide a cholinergic innervation to the entire brainstem reticular formation that may be critical in the generation of the state which involves recruitment of massive populations of reticular neurons. Major ascending projections into the thalamus, including the lateral geniculate, may provide the means by which phasic (including ponto-geniculo-occipital spikes) and tonic activation is communicated in part to the cerebral cortex. Descending projections through the caudal dorsolateral pontine tegmentum and into the medial medullary reticular formation may be involved in the initiation of sensorimotor inhibition. Although it appears that the pontomesencephalic cholinergic neurons play an important, active role in the generation of paradoxical sleep, this role may be conditional upon the simultaneous inactivity of noradrenaline and serotonin neurons, evidence for which derives from both pharmacological and recording studies.(ABSTRACT TRUNCATED AT 400 WORDS)