1. Stimulation of the reticular formation of the brain stem evokes changes in the EEG, consisting of abolition of synchronized discharge and introduction of low voltage fast activity in its place, which are not mediated by any of the known ascending or descending paths that traverse the brain stem. The alteration is a generalized one but is most pronounced in the ipsilateral hemisphere and, sometimes, in its anterior part. 2. This response can elicited by stimulating the medical bulbar reticular formation, pontile and midbrain tegmentum, and dorsal hypothalamus and subthalamus. The bulbar effect is due to ascending impulses relayed through these more cephalic structures. The excitable substrate possesses a low threshold and responds best to high frequencies of stimulation. 3. Some background synchrony of electrocortical activity is requisite for manifestation of the response. In the "encephale isolé", reticular stimulation has no additional effect upon the fully activated EEG. With synchrony, in spontaneous drowsiness or light chloralosane anesthesia, the effect of reticular stimulation is strikingly like Berger's alpha wave blockade, or any arousal reaction. In full chloralosane anesthesia, high voltage slow waves are blocked but no increase in lower amplitude, fast activity occurs. With barbiturate anesthesia, the reticular response is difficult to elicit or is abolished. 4. In the chloralosane preparation, the secondary cortical response evoked by a sensory volley is generally unaffected by reticular stimulation. Consequent sensory after-discharge is abolished, however, as is pyramidal tract discharge and jerky movements referable to it. Outside the sensory receiving area, secondary responses themselves may be reduced or prevented. 5. The convulsive spikes produced by local strychnine and those of a fit following supramaximal cortical excitation, are not decreased by stimulating the reticular formation. 6. The cortical recruiting response induced by low frequency stimulation of the diffuse thalamic projection system is reduced or abolished by reticular stimulation. 7. There is some indication that the cortical effect of reticular stimulation may be mediated by this diffuse thalamic projection system, for synchronized activity within it is similarly prevented by reticular excitation, and direct high frequency stimulation of this system, within the thalamus, reproduces the reticular response. It is possible, however, that other mechanisms may be involved in its mediation. 8. The reticular response and the arousal reaction to natural stimuli have been compared in the "encéphale isolé", in which EEG synchrony was present during spontaneous relaxation or was produced by recruiting mechanisms, and the two appear identical. 9. The possibility that the cortical arousal reaction to natural stimuli is mediated by collaterals of afferent pathways to the brain stem reticular formation, and thence through the ascending reticular activating system, rather than by intra-cortical spread following the arrival of afferent impulses at the sensory receiving areas of the cortex, is under investigation. 10. The possibility is considered that a background of maintained activity within this ascending brain stem activating system may account for wakefulness, while reduction of its activity either naturally, by barbiturates, or by experimental injury and disease, may respectively precipitate normal sleep, contribute to anesthesia or produce pathological somnolence.