The daily timing of rapid eye movement (REM) sleep reflects an interaction between the circadian pacemaker located in the suprachiasmatic nucleus of the hypothalamus (SCN) and a homeostatic process that induces compensatory REM sleep in response to REM sleep loss. Whether the circadian variation in REM sleep propensity is caused by active promotion, inhibition, or passive gating of REM sleep homeostasis by the SCN is unknown. To investigate these possibilities, compensatory responses to 24 hr REM sleep deprivation (RSD) were compared between SCN-lesioned (SCNx) and sham-lesioned rats at different times of day in constant dark. The attempts to enter REM sleep (REM tendency) increased during RSD in all rats and were modulated by circadian phase in sham-lesioned, but not SCNx rats. REM sleep homeostasis interacted with circadian time, such that REM tendency doubled during the rest phase in sham-lesioned rats relative to SCNx rats (F((6,93)) = 17.9; p = 0.0001). However, REM tendency was indistinguishable between SCNx and sham-lesioned rats during the activity phase, suggesting the SCN does not inhibit REM tendency at this time. By contrast, the amount of compensatory REM sleep examined 2, 6, 12, or 24 hr after RSD did not depend on circadian phase. Thus, transitions into REM sleep are facilitated by the SCN during the rest phase, but the amount of REM sleep, once initiated, is determined primarily by homeostatic mechanisms. This work supports a role for the SCN in the active promotion of REM sleep at specific times of day.