The neurosteroids pregnenolone sulfate and allopregnanolone affect memory processes in an opposite manner, pregnenolone sulfate acts as a potent memory-enhancer whereas allopregnanolone impairs memory performance. The mechanisms underlying these memory modulating properties have yet to be elucidated. We have previously reported that infusions of either neurosteroid into the nucleus basalis magnocellularis, one of the main forebrain cholinergic nuclei, differentially affect spatial memory in rats. The relationships between memory performance and paradoxical sleep are well documented, therefore we investigated whether neurosteroids infused into the nucleus basalis magnocellularis affected the sleep-wakefulness cycle in rats, measured by electroencephalographic recordings. Results show that pregnenolone sulfate (5 ng) increased by 12%, whereas allopregnanolone (2 ng) decreased by 24%, the duration of paradoxical sleep in the 24 h interval following injection compared to control recordings. Pregnenolone sulfate inhibits GABA(A) receptors whereas allopregnanolone stimulates them. Since cholinergic neurons of the nucleus basalis magnocellularis are GABA-modulated, it may be postulated that these neurosteroids modify paradoxical sleep by acting on the cholinergic transmission. This may account, at least in part, for the memory modulating properties of these compounds.