The noradrenergic "REM-off" neurons in the locus coeruleus cease firing, whereas some cholinergic and non-cholinergic "REM-on" neurons increase firing during rapid eye movement sleep. A reciprocal interaction between these neurons was proposed. However, acetylcholine did not inhibit neurons in the locus coeruleus. Nevertheless, since GABA levels increase during rapid eye movement sleep and picrotoxin injections into the locus coeruleus reduced rapid eye movement sleep, it was hypothesized that GABA in the locus coeruleus might play an intermediary inhibitory role for rapid eye movement sleep regulation. Therefore, the effects of GABA or carbachol (a mixed cholinergic agonist receptor) alone, as well as an agonist of one in presence of an antagonist of the other, in the locus coeruleus were investigated on sleep-wakefulness and rapid eye movement sleep. The cholinergic agonist carbachol increased, while the muscarinic antagonist receptor scopolamine decreased, the frequency of induction of rapid eye movement sleep per hour. In contrast, GABA and picrotoxin increased and decreased, respectively, the duration of rapid eye movement sleep per episode. However, when carbachol was injected in the presence of picrotoxin or GABA was injected in the presence of scopolamine, the effect of GABA or picrotoxin was dominant. Microinjection of both scopolamine and picrotoxin in combination reduced both the frequency of initiation as well as the duration per episode of rapid eye movement sleep. From these results we suggest that in the locus coeruleus cholinergic input modulates the frequency of induction of rapid eye movement sleep and this action is mediated through GABA interneurons, whereas the length of rapid eye movement sleep per episode is maintained by the presence of an optimum level of GABA. A model of neural connections for initiation and maintenance of rapid eye movement sleep is proposed and discussed.