Experimental data indicate a role for the prefrontal cortex in mediating normal sleep physiology, dreaming and sleep-deprivation phenomena. During nonrandom-eye-movement (NREM) sleep, frontal cortical activity is characterized by the highest voltage and the slowest brain waves compared to other cortical regions. The differences between the self-awareness experienced in waking and its diminution in dreaming can be explained by deactivation of the dorsolateral prefrontal cortex during REM sleep. Here, we propose that this deactivation results from a direct inhibition of the dorsolateral prefrontal cortical neurons by acetylcholine, the release of which is enhanced during REM sleep. Sleep deprivation influences frontal executive functions in particular, which further emphasizes the sensitivity of the prefrontal cortex to sleep.